essay principles of marketing analysis of brand marketing strategy vinamilk and recommentdation

Over 40 years of establishment and development, Vinamilk hasbeen leading the dairy industry in Vietnam for many years and predicted tocontinuously keeping its firm position in the future

UNIVERSITY OF FINANCE - MARKETINGMARKETING FACULTY

Course code: 2021702032613

II.THE MARKETING ENVIRONMENT 8

1.The macro environment 8

REFERENCES 32MEMBERS LIST 33

1 Reason for choosing this topic

Why Vinamilk? Over 40 years of establishment and development, Vinamilk hasbeen leading the dairy industry in Vietnam for many years and predicted tocontinuously keeping its firm position in the future.

The question is how does Vinamilk have campaigns and strategies to approach themarket and consumers in the wisest way? That is the reason why my group choosesthe topic " MARKETING STRATEGY OF VINAMILK ENTERPRISES" as thefinal thesis of their Marketing Principles course.

2 Purpose of the study

Analyze the marketing strategy and propose recommendations to promote thegrowth of Vinamilk in general and Vinamilk's dairy products in particular.

3 Subjects and scope3.1 Subjects of the study

Our subjects of the study are the marketing strategy of Vinamilk.3.2 Scope of the study

Scope of the study on Vinamilk dairy business in Vietnam market The fact thatthere are personal points of view and orientation recommendations cannotimmediately put into practice.

4.Research method

In the study process, a group discussion method was implemented to identify themarketing strategy of the company Our group also applies methods from theknowledge that learned from: Management, Marketing principes, etc In addition,the study also get support from reference documents of Vinamilk.

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CONTENTI INTRODUCTION

VINAMILK is a leading nutrition group in Vietnam reaching more than 31countries and generating over USD 1,5 billion/year in revenue The firm has been inoperation and development for over 40 years, with continual changes Althoughbeing present in the Vietnamese market for a long time, Vinamilk's position in ourcountry's dairy sector has not been defeated Their products range from core dairyproducts such as liquid and powdered milk, to value- added dairy products such ascondensed milk, drinking and spoon yoghurt, ice cream, cheese and healthfulbeverages.

Despite being hit by the COVID-19 outbreak in 2020, VINAMILK stronglydemonstrates the need for sustainable growth for society, especially businesses Inthe face of a pandemic, trade war, global supply chain slowdown, and otherchallenges, Vinamilk has updated its business strategy and continues to provideinnovative and high-quality products to consumers In 2020, Vinamilk'sconsolidated net sales and profit after tax were VND 59,723 billion and VND11,236 billion, respectively, increasing 6% and 6.5 percent from 2019.

Vietnam Dairy Products Joint Stock Company was established on theDecision No 155/ 2003 QD- BCN dated October 10, 2003 of the Ministry ofIndustry on transforming the State-owned enterprise Vietnam Dairy ProductsCompany into Vietnam Dairy Products Joint Stock Company Company businessregistration certificate No 4103001932 issued by the Department of Planning andInvestment of Ho Chi Minh City on November 20, 2003 Before December 1, 2003,the Company was a State-owned enterprise under the Ministry of Industry. Full name: Vietnam Dairy Products Joint Stock Company

 Name: VINAMILK

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 Logo:

 Slogan: “ Vuon cao Viet Nam”

 Authorized capital: 20,899,554 million dong

 Head office: 10 Tan Trao, p Tan Phu District 7, HO CHI MINH Phone: (848) 54 155 555 / Fax: (848) 54 161 226

 1978: The Company was transferred to the Ministry of Food Industry and wasrenamed United Enterprise of Milk Coffee Cookies and Candies I

 1992: The United Enterprise of Milk Coffee Cookies and Candies I wasformally renamed Vietnam Dairy Company.

 2003: The Company was formally transformed into a joint stock company inNovember, and renamed as Vietnam Dairy Products Joint Stock Company(Vinamilk), to reflect its change in legal status (Vinamilk, 2014)

 2010, Expanded to New Zealand and more than 20 other countries.

 2016, With USDA United States- standard Vinamilk Organic Fresh Milk, we arepaving the path for the high-end organic food market in Vietnam AngkormilkDairy Factory in Cambodia is the first dairy factory in a foreign country.

 2017, The first European-standard 100 percent Organic Fresh Milk produced inVietnam was launched.

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 2018, Vinamilk was the first company in Vietnam to introduce 100 percent A2Fresh Milk.

 2019, Inaugurated Vinamilk Tay Ninh dairy cow “Resort”, and officiallyconfirmed to own the Global G.A.P Standard Farm System Asia's largest interms of number of farms.

3.Awards and Achievement

 1985 - 1996, Medal labor gain from class III to class I. 2005 - 2016, Medal independent gain from class III to class I.

 1995 - 2020, Top 10 high quality VIETNAM goods (Association of high qualityVietnamese goods).

 2012 - 2020, National brand (Ministry of Industry and Trade).

 2013 - 2010, 50 Best listed businesses in VIETNAM (Forbes magazine) andTop 500 biggest private enterprises in VIETNAM (Joint Stock CompanyAssessment Report VN).

 2016 - 2020, 50 most valuable brands in Vietnam (Forbes magazine) and Top 10sustainable businesses in 2016 (VCCI).

4 Message of Vinamilk4.1 Vision

“Becoming Vietnam's top symbol of faith in nutrition and health products thatbenefit human life.”

4.2 Mission

“Vinamilk is committed to providing the community with top quality andhigh-quality nutrition with its own respect, love, and responsibility for human lifeand society.”

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4.3 Core values

 Integrity: Integrity, honesty in conduct and in all transactions.

 Respectability: Respect yourself, respect colleagues, respect the company,respect partners, respect cooperation.

 Equity: Employees, customers, suppliers, and other stakeholders must all betreated fairly.

 Morality: Respect established moral norms and act morally.

 Retainer: Comply with the law, the Code of conduct and the company'sregulations, policies and regulations.

4.4 Business philosophy

Vinamilk aspires to be a popular product in all regions and countries.Therefore, we keep in mind that Vinamilk's companions are quality andinventiveness Customers are at the heart of Vinamilk's business, and the companyis dedicated to serving all of their demands.

II.THE MARKETING ENVIRONMENT1.The macro environment

1.1 Demographic environment 1.1.1 Population

- The results of the 5th Census in Vietnam show that on April 1, 2019, the totalpopulation of Vietnam reached 96,208,984 people According to the portal of theMinistry of Labor, the population of urban areas in 2019 in Vietnam is 33,059,735people, accounting for 34.4%; in rural areas is 63,149,249 people, accounting for65.6%.

→ This is an essenttial factor for the development of the dairy industry in ourcountry and the fact shows that this great potential has a great influence on theannual increase in milk consumption by up to 30%, which is strongly concentrated

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in urban areas At the same time, living standards are increasingly improved, thisalso creates opportunities for dairy businesses in the market with great potential anddeveloping like Vietnam.

1.1.2 Age structure

Picture 1: Chart of population composition by age(Source: Asian Demographics www.asiandemographics.com)

Population data by age (estimate):

- 23,942,527 adolescents under 15 years old (12,536,210 boys / 11,406,317 girls) - 65,823,656 people aged 15 to 64 years (32,850,534 men / 32,974,072 women) - 5,262,699 people over 64 years old (2,016,513 men / 3,245,236 women)→ Large population, high birth rate, gradually improving income, increasingmaterial life, health issues are increasingly concerned The campaigns to drink anddistribute free milk of dairy companies all contribute to promoting, expanding brandawareness and creating a potential market for the Vietnamese dairy industry ingeneral and for Vinamilk in particular.

1.2 Economic environment

According to the forecast of the National Center for Socio-economicInformation and Forecast (NCIF), the Ministry of Planning and Investment, on thebasis of assessing Vietnam's economic background after the 2016-2020 period,considering the Domestic and foreign factors are likely to affect Vietnam's economyin the coming period, NCIF forecasts that in the period of 2021 - 2025, Vietnam'sGDP growth rate will reach about 7%/year economy is basically stable, inflation isat 3.5 - 4.5%/year Labor productivity improved with an increase of about

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6.3%/year With this growth result, by 2025, Vietnam's GDP per capita will reachabout 4,688 USD, bringing Vietnam into the group of high-middle-incomecountries.

→ In general, people's living standards have been relatively improved andincreased The upward trend in average income will not only create a higherpurchasing power in the market but also lead to different needs and wants fromconsumers They may demand more or are willing to increase their spending forfactors such as quality, variety, convenience, aesthetics, etc In addition, anothertrend is the distribution of income Many divisions among the population is also anissue that the company needs to pay attention to.

1.3 Cultural environment

The 4.0 era brings easy access to information through newspapers, socialnetworks, the internet contributing to increasing human demand, Vinamilk tookadvantage of this opportunity to offer advertisements that target customers'psychology, habits of using sweet products as well as canned products or milk-related products This makes marketing and advertising activities and productdistribution to customers more convenient

At the same time, one of the psychological habits of Vietnamese people is thatthey tend to be less likely to change their choices when they trust a certain brand, soit's easier for Vinamilk to increase sales and have more loyal customers If quality,brand image, high reputation In addition, Vinamilk's advertisements alwaysemphasize the formation of a healthy lifestyle, comprehensive development of thebody and mind of Vietnamese people as a strength.

1.4 Political environment

The stable political situation of Vietnam is decisive in economicdevelopment, creating jobs, increasing incomes for workers, and increasingconsumption demand of the society This also has a positive impact on the creation

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and implementation of strategies of Vietnamese enterprises in general and Vinamilkin particular

No matter where a business operates, it is affected by the legal system andpolicies of that country's government Those systems and policies are: business toregulate business behavior, consumption, trade exchange relations

a The situation of political security, the government's operating mechanism:This is a factor that affects all business industries in a territory, institutionaland legal factors can threaten the viability and development of any industry Evidence: Risks from unstable export markets: More than 90% of thecompany's export revenue comes from Iraq The country's unstable political andeconomic situation has adversely affected Vinamilk's export revenue So thecompany is expanding its export market to Australia, USA, Canada, Thailand andother countries

b The system of tools and policies of the State have an impact on Marketingactivities such as: tax policy, financial policy, monetary policy, foreignpolicy, policy on development of economic sectors…

Evidence: For businesses, advertising is an effective marketing activity.According to regulations, advertising costs are allowed at 10%, but companies withhigher costs are Dutch Lady Company (19.2%), Vinamilk Company (12.9%), etc.

1.5 Technological environment develop of technology

Science - technology factors creates many opportunities and also exists manychallenges, forcing businesses to learn carefully to come up with marketingstrategies As one of the input factors of the production process, this is an importantfactor determining whether the production of the enterprise is effective or not.Therefore, it also affects Vinamilk's marketing activities: What technologicalfactors will Vinamilk use to promote product consumption in the market?

Currently, the production technology equipment used by Vinamilk are ofinternational standards, using modern packaging technology, and importing

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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 Usingadvanced technology for herd rearing such as: Ethernet network, Bluetooth wirelessconnection technology, Wi-Fi and remote radio wave identification technology withautomatic identification chip RFID tags, the system Biosensors, surveillancecameras help increase the production of dairy cows.

→ 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 fromabroad

1.6.2 Challenge

- Some trends of the natural environment have great influence on marketingactivities of enterprises: Scarcity of some raw materials, increase in energy costs,increase in environmental pollution, the intervention of state into the rational useand reproduction of resources

- Perishability, easy metamorphosis of milk if not preserved and handled in time.This adversely affects the quality of the milk From here, there is a requirement tohave a specific strategy to preserve milk and produce high quality products.

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2 The micro environment2.1.The company

Vinamilk's organizational chart is presented in a professional manner andallocates departments in a scientific and reasonable manner, specificallydecentralizing the responsibilities of each member and department in the company.The organizational chart helps Vinamilk operate in the most effective way, helpingdepartments work closely together to create a strong Vinamilk

2.2 Suppliers

In addition, dairy farms are very important strategic partners of Vinamilk inproviding consumers with leading premium products Milk purchased from farmsmust always meet the quality standards signed between Vinamilk and domesticdairy farms Vinamilk also imports powdered milk from Australia and New Zealandto meet production needs in both quantity and quality Vinamilk's two major milkpowder suppliers are Fonterra, Hoogwegt International

Table 1: List of some major suppliers cooperating with Vinamilk

2.3

Marketing intermediaries 2.3.1 Distribution intermediaries

- Vinamilk's distribution intermediaries are distributors, wholesalers, retailers,organizatioDistribution intermediaries and businesses such as supermarkets, dairyagents, grocery stores, and marketing companies Product distributors areresponsible for bringing products to consumers

- Thanks to agents, retailers, etc., Vinamilk can reduce a huge cost compared toopening its own sales showrooms According to the collected statistics, Vinamilk

Supplier Products Offered· Fonterra (SEA) Pte Ltd Milk powder· Hoogwegt International BV Milk powder· Perstima Binh Duong Box

· Tetra Pak Indochina Cartons and packing machines

has more than 141,000 sales agents across 64 provinces and cities across thecountry, along with domestic distribution, Vinamilk also expands to foreign IfVinamilk spends its own money to open agents, the capital will be very large,leading to high risks Marketing intermediaries such as supermarkets, agents, etc.,have good performances in marketing - sales, and deliver products to customersquickly, will contribute to increasing the prestige and reputation of products,making an impact to Vinamilk's product consumption ability

2.3.2 Transportation

- Warehouse system with two warehouses: Ho Chi Minh City Logistics EnterpriseMinh and Hanoi logistics enterprise

- Invest in more than 300 small trucks for distributors

- Having a refrigerated vehicle system to ensure the amount of milk is an advantagecompete against the opponent

2.3.3 Financial intermediaries

- Funded by the State, specifically the Ministry of Finance Equity accounting for77% is free capital, capital mobilized from the seller of bonds, shares bonds, FDI,and ODA for investment in dairy processing projects as well as other investmentproject to develop material areas

- Bear foreign currency risk arising when there is a difference between accountsreceivable and payable in foreign currencies, which materially affects businessresults and risk of high liquidity.

2.3.4 Advertising

Advertising agencies play a very important role in promoting Mostly,Vinamilk usually use the image of a happy dairy cow on a green meadow withchildren has been deeply imprinted in the minds of Vietnamese consumers,especially children.

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2.4 Competitors

Vinamilk's current competitors in liquid milk products include: Dutch Lady,F&N, Dutch Mill, Hanoimilk, ELOVI, Nutifood, Tan Viet Xuan, Lothamilk Inwhich Dutch Lady is still a direct and worthy competitor especially when the twosides are quite balanced in terms of liquid milk consumption The data in the chartshows that as of May 2007, Vinamilk's liquid milk market share was 38.7%, takingthe No 1 position from Dutch Lady with 35.7% market share (by volume)

Picture 2: Chart of market share of liquid milk(Source: Nielsen 2007)

For liquid milk, the alternative products that are likely to reduce thecompany's market share are nut milk, milk-based beverages, almond milk, non-dairy milk, goat milk, etc.

2.5 Customers

Customers and their needs have an important influence on a company'soperations In order for customers to trust and buy a product, the product must be ofgood quality and the price must match the tastes of consumers Vinamilk hassucceeded in satisfying their clients, it can be seen in this chart.

Picture 3: Chart of experience of using Vinamilk’s productIn addition to domestic customers, Vinamilk has

also managed to restore a relatively good number ofpotential customers abroad.

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2.6 Publics

A group of people who are and are likely to be interested in the impact of abusiness Public groups include: Finance, media, community-society, government,local government, employees

- With the desire to become the most favorite product in all regions and territories,Vinamilk is always interested in the stages of media advertising on radio, television,newspapers, Vinamilk brand is recognized Voted as "famous brand" and 100strongest brands voted by the Ministry of Industry and Trade in 2006, Vinamilk wasalso voted in the top "10 high-quality Vietnamese goods" from 1995 to 2007 - For many years, Vinamilk has always been interested in sponsoring activities:scholarship funds for children, taking care of 20 Vietnamese heroic mothers,building 72 gratitude houses, 120 charity houses In addition, Vinamilk alsosponsors many other television programs such as: National Youth - Children'sfootball named "Vinamilk Cup"; "Three stars lost edition", "Vietnamese movieweekend",etc.With regular appearances Advertising on television, participating insponsorship programs, and being constantly mentioned by the media is anopportunity for Vinamilk to widely promote its dairy products to a wide range ofconsumers.

 Rural areas : accounting for 65.6% of the population (2019), this rate has

decreased a lot compared to previous years but is still a high number However,the view that "rural people have low incomes and living standards, so theyrarely consume dairy products" is no longer true Today the consumption for

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