individual assignment analyzing marketing environment of th group

And the clearest focus provided by mission of TH Group is: With the spirit of being close to nature, TH Group always tries its best to nurture Vietnamese body and soul by providing food

Marketing Principles

INDIVIDUAL ASSIGNMENT

Analyzing marketing environment of

TH Group

Full name: Nguyễn Thị Ngọc Huyền

Class: HM1602

Student ID: HS150125

Lecturer: Bùi Thị Hạnh Thảo

Course: MKT101 – Marketing principles

Date: Spring 2021

Table of contents

● Company

● Vision & Mission

●Product

● The company

● Suppliers

● Marketing intermediaries

● Competitors

● Publics

● Customers

● Demographic

● Economic

● Natural

● Technological

● Social and Cultural

● Political

environment?

1 Introduction

TH Group was honored to receive the award "Top 10 Brands of Vietnam 2018" voted by the Vietnam Economic Times This award is to honor Vietnamese enterprises with outstanding achievements in production and business activities , actively innovate, create, transform digitally and make efforts for the development of the community (Nguyễn Hằng/VOV1, 2019)[1]

In this essay we will analyze the marketing environment of TH Group Firstly, I will introduce TH Group Secondly, we will analyze several factors of the microenvironment and macroenvironment of TH Group in Vietnam Finally I will give a discussion of how the company can react

in the future to the environment

COMPANY

TH Group was established in 2009 with financial advice from Bac A Bank Commercial Joint Stock Bank, especially focusing on investment in the

dairy industry and food processing( Th True Book,2019,p 6)[2] The investors of the TH Group are mostly private The chairwoman of the TH Group is Mrs Thái Thị Hương who is ranked by Forbes as the 50th position in the list of 2015 Asia's Power Businesswomen (Forbes, 2016) [3] Mrs Thái Hương has been Deputy Chair and CEO of BAC A Bank (North Asia Joint Stock Bank) since 1994 Bac A Bank is the TH project's investment advisory TH Group is formed with 3 member companies taking on different roles according to the scientific work map in a

professional closed process The first company in charge of managing the dairy farm (TH Milk Food JSC) ensures the supply of high quality raw materials The second company (TH milk JSC) performs the role of processing and applying Europe's leading technology to make fresh, nutritious milk glasses The third company (TH food chain JSC) performs

the task of distributing products professionally to consumers (TH True Book 2019, p 8-9)[4]

MISSION AND VISION

In conjunction with that the TH Group's vision is known TH Group wants

to become the leading manufacturer in the food industry of natural origin With serious and long-term investment combined with the world's most

modern technology, TH Group is determined to become a world-class product brand that is loved by everyone and elevates the national brand And the clearest focus provided by mission of TH Group is: With the spirit of being close to nature, TH Group always tries its best to nurture Vietnamese body and soul by providing food sources from nature, safe and nutritious with 5 core values: True happiness, For public health, Completely from nature,

Friendly with environment, Outstanding thinking, Benefit harmony (TH Group Global, 2009)[5].

Product

According to Vntrade.org, since our introduction to the market in 2010, the portfolio of dairy products purely made with fresh milk from the TH farm have been expanded and marked in the heart of consumers through various brands:

TH true MILK (UHT fresh milk, pasteurized fresh milk, formula fresh milk),

suitable for children from 2 years old, TH true YOGURT (stirred yogurt,

probiotic yogurt, UHT drinking yogurt), TH true CHEESE (natural cheese),

TH true BUTTER (natural butter) and TH true ICE CREAM (natural ice-cream) Continuing our legacy of the nutrition evolution, in 2018, TH

introduced a series of purely natural nut milk TH true NUT which is

refined-sugar-free pioneering suitable for diabetic patients Healthy beverage

portfolio of TH Group has been created purely natural for various needs of consumers including: naturally purified water TH true WATER from natural groundwater, roasted rice drink TH true RICE, fruit juice TH true JUICE and juice milk drink TH true JUICE MILK, high-quality vegetable, fruit and rice cultivation (FVF) of TH, suitable for children of developing age and all ages, the whole family (TH Group – Dairy Products from fresh milk, Nut

Milk, Healthy Beverage, Natural Vegetables and Foods, Retail Chain, 2020)[6]

In the period 2010-2018, the revenue of dairy enterprises is constantly growing

at an average rate, the dairy industry in Vietnam has a CAGR of 12.7% / year Dairy revenue growth is mainly driven by two main segments: powdered milk and liquid milk, accounting for 75% of the total market value Liquid milk is also TH's product with large sales volume(Hiệp hội Sữa Việt Nam, 2019) [7].TH Group owns 16 lines of dairy-related products along with TH Schools educational facilities and TH Medical Hospital , TH with a variety of products

to increase customer market share (TH Group Global, 2020)[8]

2 Microenvironment factor

The company

Presentation of the TH Group, after more than 8 years, TH products have

been introduced to the market with more than 70 types of products based

on fresh milk The TH group is a financial structure who controls 3 companies: TH Milk Food JSC,TH milk JSC,TH food chain JSC (Co cau tap doan TH, TH True Book 2019, p.16)[9] The investment of TH Milk

Food was estimated at $US 350 million(2012) and it was claimed to be

$US 1.2 billions 2015(The solution for medium and large scale farms, n.d)

[10] According to Forber, TH Group had invested $450 million to import and raise cows (TH True Milk certified as Asia's biggest hi-tech cow farm ,2015) [11] And according to retail metrics for whole urban markets provided by Nielsen - a leading market research company In the first 11 months of

2018, TH true MILK milk was grew by nearly 22% in volume (while the whole liquid milk industry hardly increased), a 30% growth in revenue To date, TH true MILK's market share in the fresh milk segment in urban retail channels has reached nearly 40%, ranking first in the fresh milk segment In 2018, TH's revenue reached more than 7,000 billion VND According to financial experts' prediction, TH is evaluated as a potential company The exponential increase in revenue and profit figures in recent years has made TH's cumulative loss reduction faster than the accumulated plan That proves the potential and strength of TH Group, which owns the

TH true MILK brand (Lãi ròng của TH true MILK tăng 15 lần chỉ trong 5 năm, 2019)[12]

TH targets the most desired product segment of consumers, fresh and clean, so after only 5 years of establishment, up to now, TH true MILK has occupied the No 1 position in the fresh milk market, a market leader

in organic products and with the share up to over 40%, becoming one of the most formidable competitors in the dairy market Currently TH true , MILK has a full range of fresh milk products to serve all subjects, such as pasteurized fresh milk, yogurt, fresh milk formula for children 1-6 years old, fortified milk for adults (Tôi sẽ đưa TH true MILK ra thế giới, 2015) [13] TH Group is also the owner of NASU sugar project with investment scale of 90 million USD, NASU products are highly regarded by clients including leading food and beverage companies and the daily consumers (TH Group – Dairy Products from fresh milk, Nut Milk, Healthy Beverage, Natural Vegetables and Foods, Retail Chain , 2020)[14]

Supplier

Supply chain is a modern paradigm According to Ganeshan & Harrison wrote in his research report “ Introduction to Supply Chain Management

”: Supply chain is a network of distribution options and the means to carry out the procurement of materials, transforming raw materials This material is through intermediaries to produce products, distribute this

product to consumers (Medium, 2018)[15] TH True Milk is used a closed supply chain model and operates under the roles of three companies from cow raising, milk collection, milk processing, and distribution TH's suppliers include breeds, farms, technology, lines, and production machinery.In Nghe An, TH has a 8.100 ha field with maize, sorghum, sunflower, mombasa grass (USA) TH has been managed directly by two multinational companies, Israel's Afikim company on cow herd

management and Totally Vets Company of New Zealand - managing veterinary treatment TH's cows are imported from world famous dairy countries such as New Zealand, Australia, America, Uruguay and Canada have clear pedigree, ensuring the best milk production (Quy trình vắt sữa kín hoàn hảo của TH True Milk: sữa không tiếp xúc với không khí một giây nào , 2019) [16] In 2011, the Israeli government invested $ 100 million in

TH Group's dairy project to increase the total cows of TH farm which has about 45,000 dairy cows of HF breed with high yield(Israel đầu tư 100 triệu USD vào dự án TH TRUE MILK của Tập đoàn TH, 2011) [17] In 2018, TH true MILK was successful with the first dairy company in Vietnam to

successfully propagate dairy herds by the method of natural selection to

have dairy cows capable of milk production (TH True book 2019,p.18)

[18] Currently, TH true MILK sterilized fresh milk products are using the packaging of Tetra Pak (Sweden) and SIG Combibloc (Germany), both of which were produced on modern technology lines, the most advanced in the world (TH Group: Hướng tới một Việt Nam xanh, 2020)[19] With sustainable development business, TH Group used a straw biodegradable company Bio-Eco - a leading manufacturer of eco-friendly products in Asia, headquartered in Thailand, is produced using advanced

technology(Tập đoàn TH tiên phong ứng dụng các giải pháp nguyên liệu tiêu dùng thân thiện với môi trường , 2019)[20]

Marketing intermediaries

Milk is known as a popular beverage, so the distribution of milk must also be ensured when customers need it According to DMSpro- the leading ACUMATICA distribution management service provider, TH True Milk's products are distributed by TH Milk Joint Stock Company, TH Transport Company and TH Milk Products are sold at more than 130,000 stores nationwide through 180 distributors (DMS, 2016)[21] Th True Milk was currently available in major retail systems such as Co.opMart, BigC, VinMart, at the same time, TH True Milk also uses distribution agents, distribution systems at stores and distributors Distributing to each agent in each region, there is a distribution management system of that region TH True Milk has its own retail system directly through retail channels and TH

True Mart stores are present in the North, Central and South regions (Thị

Trường sữa Việt nam, n.d)[22] In addition, TH's products was also distributed

via the online ordering channel, the website thmilk.vn, which has home delivery service since 2014 and TH's products were also sold on e-commerce floors, …(Tập đoàn TH đạt giải “Chăm sóc khách hàng xuất sắc của năm” tại Giải thưởng Kinh doanh Quốc tế 2018, 2018) [23]

Competitor

The marketing concept states that, to be successful, a company must provide greater customer value and satisfaction than its competitors do (Kotler and Armstrong, 2012)[24] Market analysis in 2013, Dairy Vietnam found that

TH True Milk was facing the challenge of increasingly hot competitive markets, including the typical names Vinamilk, the Dutchlady of

FrieslandCampina Vietnam

Source: Nielsen Vietnam, Báo cáo ngành Sữa Việt Nam 6 tháng đầu

2013, 2013, p3.

According to market research firm Nielsen Vietnam, as of July 2013, the current market share of liquid milk is mainly in the hands of domestic dairy enterprises,

of which, Vinamilk holds 48.7%, Friesland Vietnam with 25.7% and TH True Milk at 7.7% FrieslandCampina Vietnam has 4 lines of liquid milk in Dutch Lady occupying the main position Previously, the liquid milk market mainly belonged to Vinamilk and FrieslandCampina, now dozens of brands such as Long

Thanh, Da Lat Milk, Moc Chau, Ba Vi, Lothamilk, Vixumilk, joined(Thị phần

sữa nước- cuộc chiến thị phần ngày càng nóng, n.d)[25] While Vinamilk

currently had 5 brands of liquid milk, in 2013, Vinamilk accounts for 75% of the national milk market, of which 48.7% of the liquid milk market, a very strong

distribution network of 1,400 agents covering 64/64 provinces (Sustainable

development report 2013, 2013, page 7)[26]

Figure : Product structure and overall market share structure of the dairy

industry in 2017

Nguồn: Vinamilk, EMI, StoxPlus

In 2017, the product structure of the dairy industry was mainly powdered milk with 43%, liquid milk 32%, yogurt 12%, condensed milk 7% and soy milk 6%

In terms of market share in 2017, Vietnam dairy enterprise Vinamilk accounted for the largest total market share of 58%, followed by FCV 21%, TH True Milk 13%, and the rest 8% For liquid milk and yogurt and sweetened condensed

milk, the competitive advantage belongs to the domestic dairy enterprise with

the leading position in market share ( Chiến lược marketing sản phẩm của các doanh nghiệp sữa Việt Nam hiện nay, 2020)[27]

However, according to the statistics of the General Department of Vietnam Customs

in 2015, competitors of domestic dairy enterprises are foreign milk brands in Vietnam market, such as: FCV, Nestle, Abbott and other imported dairy brands from New Zealand, Korea, Japan, France For with powdered milk, foreign milk companies dominate the market share, especially the high-end segment and adult milk In addition, domestic dairy companies also face competition from "portable" foreign milk brands According to statistics from the General Statistics Office in 2018, import turnover of milk and dairy products in 2018 increased slightly by 2.5% compared to

2017, estimated at 963 million USD

Import turnover of milk and dairy products in the period 2010-2018

Unit: Million USD

Source: General Statistics Office

With the number of

dairy cows being raised is not large enough, Vietnam is heavily dependent on milk imports The growth rate of import turnover of milk and dairy products increased by an average of 3.9% / year for the period 2010-2018 In which, mainly imported from New Zealand, for 11 months, it increased by 27.39% over the same period to reach 260.36 million USD Singapore ranked second in turnover, reaching 125.6 million in 11 months, up 10.37% Imports from the

US market, although only ranked third in turnover, increased 2 times over the same period (i.e an increase of 105.28%) to reach $ 112.32 million

In addition to these achievements, it can be seen that the development of the dairy production and processing industry is still quite modest compared to the consumption demand of the domestic market and the development

potential of the industry Due to the large amount of powdered milk

imported from abroad for a long time, it is difficult for dairy enterprises in

Vietnam to access this market in Vietnam (Tổng Quan Ngành Công Nghiệp

Sữa, n.d; Năm 2018- những nỗ lực của ngành sữa việt nam, 2019) [28]

Publics

With the vision and mission for the community in developing the stature of Vietnamese people, after 8 years of appearance, TH True Milk has become the favorite milk brand of domestic consumers The world's leading company in the field of market research (IPSOS) has released the results of market research on

TH true MILK, according to which 100% of consumers know about the product, 96% say that the quality is products to meet their own requirements; 31% feel more attached to TH true MILK than other brands Since inception, TH has been actively building up their image TH True Book is considered a communication diary marking all the development of TH over time, the websites thtruemilk.vn, thtrueglobal.vn to promote images on social networks In addition, in 2017, TH Group cooperated with the Ministry of Health to organize the seminar "Natural herbs with human health", launching the completely natural herbal beverage TH true Herbal (TH true MILK khẳng định vị thế sữa sạch chất lượng vàng Việt Nam, 2017)[29] Typically, 2017, TH Group cooperated with the Ministry of Health to organize the seminar "Natural herbs with human health", launching the completely natural herbal beverage TH true Herbal February 14, 2017, in Hanoi,

TH Group held the inauguration of the High School in Hanoi In 2019, starting construction of TH Medical hospital In 2020, TH Group (the brand department

of TH true MILK) through the Central Committee of the Vietnam Fatherland Front presents gifts worth 1 billion VND to support and share difficulties with people in the region Trung overcame floods At the same time, TH is a sponsor

of the program "Vì tầm vóc Việt" for many years and has been broadcast on the national television channel VTV, TH's TVC advertising channels are HTV, VTV, and TV channels (TH True Book 2019,p 16-19, 158)[30]

Customer

According to Principles Of Marketing 14th, customers are the most important actors in the company’s microenvironment According to the Minister of Health of Vietnam, the results of a pilot study in a controlled community, conducted by the National Institute of Nutrition before and after, over 3,600 preschool and primary school children using TH products showed that, after 9 months, underweight malnutrition decreased by 3%, stunting malnutrition decreased by 1.5%, deficiency of some micronutrients such as vitamin A, iron, and zinc all improved pronounced.This was a scientific basis for the Ministry of Health, together with the Ministry of Education and Training, ministries, sectors and localities to develop and submit to the Government for approval the National School Milk Program and created confidence for mothers in Vietnam (TH true MILK, một câu chuyện thật, 2015)[31] TH True Milk was providing high quality products, so TH has chosen a skimpy strategy (pricing products as high as possible) along with focusing on safety, clean products for customers TH True Milk focuses

on the target group of customers who are wealthy families with children, with the brand name "Clean Milk" TH has hit the mentality of young mothers and in modern times when the environment is increasingly Contamination leads to unhygienic food, so food safety is a top priority At the same time, TH True Milk's customers also target a relatively wide range

of customers in urban and rural areas, with a concentration of big, dynamic and modern cities, interested in the health of themselves and their families

TH Milk has hit on that mentality of young consumers and people who like natural products who care about health Therefore, the price of TH True

Milk products have been always higher than the general level (Sữa tươi TH True Milk "không có đối thủ" về giá?, 2012) [32]

Demographic

Demography was the study of human populations in terms of size, density, location, gender, age, race and occupations (Kotler, Armstrong and Opresnik, 2012)[33] According to the General Department of the Census

in 2019, the population of Vietnam as of 2019 has been more than 96 million people Urban population accounts for 34.4%; 65.6% in rural areas The proportion of dependent children is the proportion of people under the working age (under 15 years old) compared to the labor force of a country

in Vietnam is 33.6%, 77.5% of the population aged 15 and over is ever-married As of early 2017, the proportion of children under 15 years old accounts for 25.2% The population tends to age with a low population

growth rate (Dân số Việt Nam, 2019)[34] As a populous country with a

high population growth rate of 1.2% per year, the dairy market in Vietnam