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
INTRODUCTION
Message of Vinamilk
“Becoming Vietnam's top symbol of faith in nutrition and health products that benefit human life.”
“Vinamilk is committed to providing the community with top quality and high-quality nutrition with its own respect, love, and responsibility for human life and society.”
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 be treated fairly.
Morality: Respect established moral norms and act morally.
Retainer: Comply with the law, the Code of conduct and the company's regulations, policies and regulations.
Vinamilk aspires to be a popular product in all regions and countries. Therefore, we keep in mind that Vinamilk's companions are quality and inventiveness Customers are at the heart of Vinamilk's business, and the company is dedicated to serving all of their demands.
THE MARKETING ENVIRONMENT
Demographic environment
- The results of the 5th Census in Vietnam show that on April 1, 2019, the total population of Vietnam reached 96,208,984 people According to the portal of the Ministry of Labor, the population of urban areas in 2019 in Vietnam is 33,059,735 people, accounting for 34.4%; in rural areas is 63,149,249 people, accounting for 65.6%.
→ This is an essenttial factor for the development of the dairy industry in our country and the fact shows that this great potential has a great influence on the annual increase in milk consumption by up to 30%, which is strongly concentrated
8 in urban areas At the same time, living standards are increasingly improved, this also creates opportunities for dairy businesses in the market with great potential and developing like Vietnam.
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, increasing material life, health issues are increasingly concerned The campaigns to drink and distribute free milk of dairy companies all contribute to promoting, expanding brand awareness and creating a potential market for the Vietnamese dairy industry in general and for Vinamilk in particular.
Economic environment
According to the forecast of the National Center for Socio-economic Information and Forecast (NCIF), the Ministry of Planning and Investment, on the basis of assessing Vietnam's economic background after the 2016-2020 period, considering the Domestic and foreign factors are likely to affect Vietnam's economy in the coming period, NCIF forecasts that in the period of 2021 - 2025, Vietnam's GDP growth rate will reach about 7%/year economy is basically stable, inflation is at 3.5 - 4.5%/year Labor productivity improved with an increase of about
6.3%/year With this growth result, by 2025, Vietnam's GDP per capita will reach about 4,688 USD, bringing Vietnam into the group of high-middle-income countries.
→ In general, people's living standards have been relatively improved and increased The upward trend in average income will not only create a higher purchasing power in the market but also lead to different needs and wants from consumers They may demand more or are willing to increase their spending for factors such as quality, variety, convenience, aesthetics, etc In addition, another trend is the distribution of income Many divisions among the population is also an issue that the company needs to pay attention to.
Cultural environment
The 4.0 era brings easy access to information through newspapers, social networks, the internet contributing to increasing human demand, Vinamilk took advantage 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 product distribution to customers more convenient
At the same time, one of the psychological habits of Vietnamese people is that they tend to be less likely to change their choices when they trust a certain brand, so it's easier for Vinamilk to increase sales and have more loyal customers If quality,brand image, high reputation In addition, Vinamilk's advertisements always emphasize the formation of a healthy lifestyle, comprehensive development of the body and mind of Vietnamese people as a strength.
Political environment
The stable political situation of Vietnam is decisive in economic development, creating jobs, increasing incomes for workers, and increasing consumption demand of the society This also has a positive impact on the creation
10 and implementation of strategies of Vietnamese enterprises in general and Vinamilk in particular
No matter where a business operates, it is affected by the legal system and policies of that country's government Those systems and policies are: business to regulate 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, institutional and legal factors can threaten the viability and development of any industry
Evidence: Risks from unstable export markets: More than 90% of the company's export revenue comes from Iraq The country's unstable political and economic situation has adversely affected Vinamilk's export revenue So the company is expanding its export market to Australia, USA, Canada, Thailand and other countries b The system of tools and policies of the State have an impact on Marketing activities such as: tax policy, financial policy, monetary policy, foreign policy, 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 with higher costs are Dutch Lady Company (19.2%), Vinamilk Company (12.9%), etc.
Technological environment develop of technology
Science - technology factors creates many opportunities and also exists many challenges, forcing businesses to learn carefully to come up with marketing strategies As one of the input factors of the production process, this is an important factor determining whether the production of the enterprise is effective or not. Therefore, it also affects Vinamilk's marketing activities: What technological factors will Vinamilk use to promote product consumption in the market?
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 identification technology with automatic identification chip RFID tags, the system Biosensors, surveillance cameras help increase the production of dairy cows.
Natural environment
Vietnam's climate is tropical and monsoonal, which will create great opportunities and challenges for the dairy industry
- In spite of tropical weather, 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, Nghe An, Son La, etc.
→ 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 abroad
- Some trends of the natural environment have great influence on marketing activities of enterprises: Scarcity of some raw materials, increase in energy costs, increase in environmental pollution, the intervention of state into the rational use and 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 to have a specific strategy to preserve milk and produce high quality products.
The micro environment
Vinamilk's organizational chart is presented in a professional manner and allocates departments in a scientific and reasonable manner, specifically decentralizing the responsibilities of each member and department in the company. The organizational chart helps Vinamilk operate in the most effective way, helping departments work closely together to create a strong Vinamilk
In addition, dairy farms are very important strategic partners of Vinamilk in providing consumers with leading premium products Milk purchased from farms must always meet the quality standards signed between Vinamilk and domestic dairy farms Vinamilk also imports powdered milk from Australia and New Zealand to meet production needs in both quantity and quality Vinamilk's two major milk powder suppliers are Fonterra, Hoogwegt International
Table 1: List of some major suppliers cooperating with Vinamilk
- Vinamilk's distribution intermediaries are distributors, wholesalers, retailers, organizatioDistribution intermediaries and businesses such as supermarkets, dairy agents, grocery stores, and marketing companies Product distributors are responsible for bringing products to consumers
- Thanks to agents, retailers, etc., Vinamilk can reduce a huge cost compared to opening its own sales showrooms According to the collected statistics, Vinamilk
Supplier Products Offered ã Fonterra (SEA) Pte Ltd Milk powder ã Hoogwegt International BV Milk powder ã Perstima Binh Duong Box ã Tetra Pak Indochina Cartons and packing machines has more than 141,000 sales agents across 64 provinces and cities across the country, along with domestic distribution, Vinamilk also expands to foreign If Vinamilk 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 customers quickly, will contribute to increasing the prestige and reputation of products, making an impact to Vinamilk's product consumption ability
- Warehouse system with two warehouses: Ho Chi Minh City Logistics Enterprise Minh 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 advantage compete against the opponent
- Funded by the State, specifically the Ministry of Finance Equity accounting for 77% 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 investment project to develop material areas
- Bear foreign currency risk arising when there is a difference between accounts receivable and payable in foreign currencies, which materially affects business results and risk of high liquidity.
Advertising agencies play a very important role in promoting Mostly, Vinamilk usually use the image of a happy dairy cow on a green meadow with children has been deeply imprinted in the minds of Vietnamese consumers, especially children.
Vinamilk's current competitors in liquid milk products include: Dutch Lady, F&N, Dutch Mill, Hanoimilk, ELOVI, Nutifood, Tan Viet Xuan, Lothamilk In which Dutch Lady is still a direct and worthy competitor especially when the two sides are quite balanced in terms of liquid milk consumption The data in the chart shows that as of May 2007, Vinamilk's liquid milk market share was 38.7%, taking the No 1 position from Dutch Lady with 35.7% market share (by volume)
Picture 2: Chart of market share of liquid milk
For liquid milk, the alternative products that are likely to reduce the company's market share are nut milk, milk-based beverages, almond milk, non- dairy milk, goat milk, etc.
Customers and their needs have an important influence on a company's operations In order for customers to trust and buy a product, the product must be of good quality and the price must match the tastes of consumers Vinamilk has succeeded in satisfying their clients, it can be seen in this chart.
Picture 3: Chart of experience of using Vinamilk’s product
In addition to domestic customers, Vinamilk has also managed to restore a relatively good number of potential customers abroad.
A group of people who are and are likely to be interested in the impact of a business 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 100 strongest brands voted by the Ministry of Industry and Trade in 2006, Vinamilk was also 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 also sponsors many other television programs such as: National Youth - Children's football named "Vinamilk Cup"; "Three stars lost edition", "Vietnamese movie weekend",etc.With regular appearances Advertising on television, participating in sponsorship programs, and being constantly mentioned by the media is an opportunity for Vinamilk to widely promote its dairy products to a wide range of consumers.
STP STRATEGY
Market segmentation and targeting
Every business has two main markets: domestic market and international market For Vinamilk, from the beginning, the main market that Vinamilk aims for is the domestic market Vietnam dairy market is divided into two segments:
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 they rarely consume dairy products" is no longer true Today the consumption for
16 nutrition of rural people is increasing But the products they welcome are popular dairy products such as fresh milk, yogurt, condensed milk.
Urban areas : accounting for 34.4% of the population (2019) and it’s tending increase Until now, urban areas have always been a large market for milk consumption (more than 80%) due to the high population density, living standards and income They are more concerned about health than rural people, so urban people often look for more high-end dairy products.
TARGETING: : Based on the level of milk consumption, Vinamilk always choose urban area is the main target market But since 2013, Vinamilk has been expanding penetration and covering rural areas with popular product lines, where growth potential is still great, the evidence is that the consumer reach point in rural areas increases year by year.
Table 2: Vinamilk's consumer reach points in urban and rural areas over the years.
(CRP: consumer reach point) (Source:Vinamilk.com)
Table 3: The dairy market segment table is based on age
0-4 years These are the ages need to be added with plenty of nutrition, DHA for development process.
These are the age which children enter the development process, needs plenty of nutrition for their body, serving the study and training process.
These are the youths-the last of development process, need to be added nutrition from milk but less.
At this age, most people have a stable income, this age may not directly use milk but they are the ones who have purchase decision and care about the quality and brand of products.
65+ years Using calcium-fortified products for the body, often using powdered milk instead of liquid milk.
Table 4: Dairy market segment table based on income
Low incomes, only enough to pay the basic needs, rarely care about nutrition needs for health.
Middle incomes should be able to pay for higher nutritional needs, but not often and continuously, with the product price considerations.
The income level is relatively good, able to pay for the need to use milk more often, less interested in price but focus on quality of product.
TARGETING: Vinamilk's product lines have been developed so far mainly for children and teenagers because these ages in the development process that needs more nutrients But recently Vinamilk has also launched nutritional products for older people.
Based on the health status, there are two main groups of diseases that the milk distributor needs to pay attention to, each group has different behaviors and milk consumption needs:
Group 1: People with diabetes, obesity
More than five million people have diabetes and 300.000 children under 5 years old are obese in Viet Nam In this group of diseases for the need for milk, they prioritize milk without sugar, skimmed and calcium-rich milks.
Group 2: People with malnutrition, rickets
Viet Nam has 1.8 million malnourished children under 5 years old Children from poor households carry the risk of malnutrition three times as much as children from better-off households The Central Highlands and the Northern Mountains where have many ethnic minorities are the highest proportions Among these ethnic minority groups, the Mong had the highest rate (65%) (UNICEF VIETNAM) People with malnutrition and rickets always need to add more nutrients to the body, milk is an indispensable part of the menu However, most children in rural and mountainous areas with malnutrition do not have the conditions to drink milk.
TARGETING: Because milk or dairy products are indispensable in the menu of malnourished people, most Vinamilk’s products are for malnourished people and rickets
SUMMARY: Vinamilk is using differentiated marketing They choose to sell many segments They are increasingly diversifying their products to suit a variety of customer segments Vinamilk develops their milk and dairy products in order to reach a large number of customers, while also expanding to other products(soft drinks, ice cream).
Positioning
To make a difference from other brands' dairy products, Vinamilk always focuses on product quality, sells products at reasonable prices and customer is center For Vinamilk, only good quality products help a brand retain customers To achieve the goal of "low-priced, high-quality products", Vinamilk has built certain competitive advantages as:
First of all, Vinamilk has a very strong financial potential.
Product differentiation: Skill in producing high quality products Vinamilk has many processing factories with large capacity Along with that, building a clean raw material area, meeting technical standards, the company has mastered the quality of products to compete with other manufacturers in the market.
Differentiation distribution: Vinamilk's distribution system covers the entire
Vietnamese market with 505 "Vietnamese Dream Milk" stores to nearly 251,000 retail points and supermarkets and convenience stores across the country Thanks to many retail points, direct shipping to the retail store will shorten the time and cost of transportation so that the product will reach the consumer at the lowest price but with the highest quality.
Image differentiation: The next difference comes from images that are extremely familiar to Vietnamese people Those are dairy cows raised with modern technology, in a clean environment The image of a happy dairy cow on a green meadow with children has been deeply imprinted in the minds of Vietnamese consumers, especially children.
People differentiation: Vinamilk meets the legitimate needs of consumers who need the advice of nutritionists to get the most suitable diet, brings health and happiness to the family, contributes to improve quality of life.
In order to be competitive, Vinamilk determines the market segment that it will enter From there, Vinamilk use competitive advantages to bring value to those segments Especially diversifying products to meet the needs of target customers and expanding its segments.
MARKETING MIX STRATEGY
Product mix
Vinamilk owns a product portfolio with a large number of product lines The product lines of Vinamilk focus on dairy products, the core lines of Vinamilk are liquid milk, yoghurt, powdered milk, and condensed milk.
Liquid milk Yogurt Powdered milk
Baby cereal Bevera-ges Adult’s nutrition products Product length
Green farm Love yogurt Organic gold
RiDieala c gold Fruit juice Sure prevent Vinamilk100% organic
Probi Yoko Gold Optimum gold Bottled water
Fresh milk with bird's nest
Vinamilk organic Dielac Alpha Gold IQ
Organic Gold Vfresh Artichoke Tea
VNM 100% fresh Fresh Dielac Aloe vera milk sour milk Mama gold drink
Yomilk Optimum gold Product dept: Vinamilk has a variety versions in each product, these are versions of some out standing products.
Table 6: Product dept VNM Green farm
ADM IQ Gold Vinamilk Probi Organic gold powdered milk Sweetened /Less sugar
850g per tin can 100ml/180ml Flavour: Chocolate
Cabassa melon Strawberry Blueberry Pineapple
Steps for each age group: step 1-2-3- 4.
Product quality
Vinamilk has applied the world’s most modern technology and equipment with the aim of producing the products that meet the international quality standards. All production lines were built Vinamilk Development and application of HACCP framework for nourishment cleanliness and security, the production line has been the universal organizations such as SGS, BVQI evaluation, and certification frameworks meet HACCP standard RVA of the Netherlands
Branding
Choosing a brand name and image for the company has an important meaning for the success of Vinamilk.More than 30 years of developing, some goods such as Ong Tho condensed milk, Dielac, Vinamilk yogurt are prevalent brand.
“Vina” in the word Vinamilk means Viet Nam-country of origin This name creates a sense of friendliness and is easy to remember Besides, Vinamilk’s images are associated with green grasslands ,sunny fields and funny cows
Packaging
Packaging contributes to buying decisions so the company has focused on designing the catchy package with necessary information on the labels (ingredients, instructions, expiration date) Besides, the capacity of each product’s type is also diversified to easily meet different using purposes of consumers In the environmental perspective, Vinamilk has developed packages that are environmentally friendly by using paper boxes, supplied by Tetra Pak, for entire liquid dairy products and beverages
The systems for packaging pasteurized dairy products ensure the three main objectives of the packaging process as: guaranteeing product quality, eliminating wastage, and lowering distribution costs.
Product support services
Vinamilk provides an official website to interact with customers Customers have handy access to get the information such as the amount of nutrients in each product Recently, its distribution network entitled “Vietnamese Dairy Dream” reached the threshold of 500 stores in all 63 provinces and cities The retail website www.giacmosuaviet.com.vn is also proving to be effective, especially during the social distancing period.
Product life-cycle
From 1976 - the year of being founded, Vinamilk has spent many landmarks from the beginning for maturation and development like today Recently, it can be seen that Vinamilk is in the maturity stage
According to Vinamilk’s financial report, growth remains stable in the first quarter of 2021 In the last quarter of 2020 and the first quarter of 2021, Vinamilk’s revenue respectively was more than 2,6 thousand billions vnd and about 3,15 thousand billions vnd.
Price
Because of the difficulties of economy in recent years, Vinamilk has to face many challenges to adjust its pricing strategies properly.
Nowadays there are many businesses in the same market segments so competitive prices affect a lot on selling product of Vinamilk Therefore, Vinamilk has taken competitive-based pricing methods Vinamilk focuses on producing high quality goods but still sets its products at competitive prices In that sense, the pricing strategies of Vinamilk are not only ensuring the profit, but also maintaining the purchasing ability of consumers.
The company owns dairy factories with large capacity, advanced technology, fully automatic can which make costs reduce significantly and ensure the product quality Besides, the company’s long experience in the industry contributes to cheap material costs and leads to competitive prices of the product These are prices of some products:
Table 7: Prices of some products Product: 100% fresh milk
Sure Prevent Gold (powdered milk for elder)
Optimum Gold(powerdered milk for baby)24 milk)
VND 244.000 for 400gram/tin can
VND 28.000 for a loc of 4 boxes
VND 213.000 for 400gram/tin can
Besides product lines of yoghurt and condensed milk, which overwhelm the market, the others face the drastic competition with other domestic dairy producers.
In that circumstance, pricing is one of the crucial strengths of Vinamilk to compete with its rivals Compared to its competitors’, there is no huge difference, especially in the liquid milk sector For example, Vinamilk’s price of a 1-liter fresh milk box is about 30 500 VND, while the same product type of other companies (TH True Milk, Lothamilk, or Dutch Lady) range from 27 600 - 34 000 VND.
When publishing new products to the market, Vinamilk chooses market- penetration pricing In order to make sure new products adapt to customers quickly and deeply, Vinamilk set a low initial price VNM Green farm is the newest liquid milk product and its price is 32,340 VND for a lot of 4 boxes With this affordable price,Green farm has quickly consumed and become family’s favourable product.
Product line pricing: Vinamilk focuses on developing their product lines and sets the price steps between some various products in a line This helps customers make suitable choices that fit their demands In the powdered milk line, Vinamilk offered Dielac Grow Plus and an upgraded version of it- Grow Plus with Bird’s nest and we can see a price step between them.
Product bundle pricing: Vinamilk combines some products with other products and offers this bundle at a reduced price to encourage purchases of consumers.Vinamilk sells combo of for Ridielac cereal with 4 different flavors.
Psychological pricing: Vinamilk is using the “The more you spend, the more you get” strategy The company usually upgrades their goods which contain more nutritious than the original one and specialized for some specific target consumers When existing products have a high value to be positioned in the minds of consumers, the new version of them will completely succeed For example: Dielac Grow Plus with Bird’s nest is an upgraded version of Dielac Grow Plus With more nutrients from bird nests, customers would not hesitate to spend a little bit more to get the better product
Maintaining stable price: Vinamilk had participated in the commitment of stabilizing prices for some products (liquid milk, powdered milk for children, elders, and patients) from April 2012 Due to the increase of world’s materials, many dairy firms set their prices 7-15% higher Nevertheless, after one year maintaining stable prices in trials, Vinamilk was forced to increase the sales prices of some product groups.
Promotional pricing: With the aim of increasing short-run sales, Vinamilk temporarily set their price lower than before to promote customer’s purchases.
On e-commerce website, many products are usually discounted from 5%.
Place
During the past few years, the distribution network of Vinamilk has proceeded to be consolidated and emphatically grown in both domestic and worldwide markets.
3.1 Supply chains and the value delivery network
Picture 4: Vinamilk’s structure diagram in distribution
Vinamilk has a mass distribution network which is present in 63 provinces of VietNam.The company’s distribution strategy is an intensive distribution strategy, with their multichannel distribution system,they want their products to be distributed all over South-east Asia The distribution system of Vinamilk follows this model with over 250 exclusive distributors and more than 220 000 points of sale nationwide.
Direct channel: VNM’s direct channel is divided into 2 smaller channels: online and offline.
- For online channel, in October 2016, Vinamilk has officially published an online selling website named Giacmosuaviet.vn.This website literally marked the first time a business in the FMCG industry has developed an ecommerce business channel.
- For offline channel, Vinamilk directly distributes to their business partners who use Vinamilk’s products to make theirs Condensed milk,liquid milk are usually distributed in this way Some partners of Vinamilk can be mentioned are Viva star coffee, Gem center,Callary,etc
Indirect channel: VNM’s indirect channel also includes online and offline channels.
- For online channel, the company cooperated with companies that manage selling websites to bring Vinamilk’s goods available on Shopee, Lazada, Sendo,
- For offline channel, it is divided into two types: modern distribution channel and traditional distribution channel.
Traditional distribution channel: The majority of Vinamilk’s total revenue comes from selling through traditional channel In this way, distributors get the products from factories and share out with resellers The biggest advantage of it is the number of members in the system and the cheaper price compared with modern distribution channel.
Modern distribution channel: Vinamilk has 7.800 modern channels they are supermarket, hypermarket, minimarts, which directly order from representatives of Vinamilk branch This distribution channel is easier to approach consumers but its obstacle is the weak ability to access rural customers
System management: Using ERP (Enterprise Resource Planning) system which is a tool used to support agencies and allow them to connect to Vinamilk distribution network By that, Vinamilk can collect and manage agencies' business information Implementing Oracle Business Suit which includes applications related to finance, distribution network and product producing management of the system It helps the company to reinforce its transparency.
Policy for agents: Vinamilk always gives preferential treatment and applies discount rates for agencies based on the quantity of imported goods and agents’ monthly revenue.
Promotion
Vinamilk uses push - pull strategy In push marketing, VNM’s goal is to bring the brand and products to customers Firstly, they offer discounts to resellers in many ways to encourage sales Secondly, VNM has qualified and trained sale-staffs that are trouble-free to reach and sell products to consumers In pull strategy, VNM promotes brand recognition with customer engagement and visibility and the customers themselves find and purchase the product.
Advertising: Although Vinamilk has appeared in the market since 1976 and is known by the majority of people, the company does not hesitate to spend nearly
5 billion VND a day for advertising In the first three quarters of 2017,for every
5 billion VND spent on advertising and research every day,Vinamilk earns 128 billion VND in revenue.
Picture 5: Chart of advertising cost and company's revenue
By multichannel marketing, Vinamilk can communicate with a large number of people concurrently Vinamilk’s images are pervasive on mass media such as television, web pages, posters, etc Specially, their advertisements are renewed and developed regularly so they can bring new messages and satisfy the audience
Vinamilk decided to develop attractive, family-oriented video content using 3H strategy – “Hero, Hub, Help” – a new approach.
Hero: directing consumers attention by capturing trendy content Vinamilk prioritizes investment and creates videos that capture music trends with appearances of actors Huynh Lap and Thu Trang, Lam Vy Da,etc.
Hub: Branding based on basic content to increase consumer interest Vinamilk has developed video series such as video series of children’s songs and the “Clean Farm” series It created funny ads that attract kids and those ads gradually present during the meal and entertainment time of Vietnamese children. Help: Educational content, help with related knowledge.
Vinamilk also develops on making content that present tips for adults For instance,VNM made an instruction video of making avocado ice cream and through that video,the company concurrently popularize Ong Tho condensed milk - one of ingredients to make avocado ice cream
Sale promotions: Vinamilk has also applied many promotions with different forms such as: discounts, incentives for customers who are members ofVinamilk, gift exchange when collecting many gift stamps, giving 15% of the volume but the price remains the same In aditional, Vinamilk offers weekly flash sale for online purchases on their e-commerce website.
Personal selling: In order to increase sales and build customer relationships, Vinamilk has chosen staff who have good communication skills and understand customer’s psychology.
Public relation: Vinamilk always builds good relations and obtains favorable publicity, building up a good corporate image.
RECOMMENTDATION
Product
Recently, Vinamilk has put much effort into expanding the Company’s brand to meet the needs of clients from newborn children, children, youths, grown-ups, additionally individuals with special needs Besides the products with main brand title as “Vinamilk”, the Company also claims the brand title “Dielac” for its powdered milk item line, and “Vfresh” for the products of beverage line.
Vinamilk owns a product portfolio with a large number of product lines The product lines of Vinamilk focus on dairy products, the core lines of Vinamilk are liquid milk, yoghurt, powdered milk, and condensed milk.
Liquid milk Yogurt Powdered milk
Baby cereal Bevera-ges Adult’s nutrition products Product length
Green farm Love yogurt Organic gold
RiDieala c gold Fruit juice Sure prevent Vinamilk100% organic
Probi Yoko Gold Optimum gold Bottled water
Fresh milk with bird's nest
Vinamilk organic Dielac Alpha Gold IQ
Organic Gold Vfresh Artichoke Tea
VNM 100% fresh Fresh Dielac Aloe vera milk sour milk Mama gold drink
Yomilk Optimum gold Product dept: Vinamilk has a variety versions in each product, these are versions of some out standing products.
Table 6: Product dept VNM Green farm
ADM IQ Gold Vinamilk Probi Organic gold powdered milk Sweetened /Less sugar
850g per tin can 100ml/180ml Flavour: Chocolate
Cabassa melon Strawberry Blueberry Pineapple
Steps for each age group: step 1-2-3- 4.
Vinamilk has applied the world’s most modern technology and equipment with the aim of producing the products that meet the international quality standards. All production lines were built Vinamilk Development and application of HACCP framework for nourishment cleanliness and security, the production line has been the universal organizations such as SGS, BVQI evaluation, and certification frameworks meet HACCP standard RVA of the Netherlands
Choosing a brand name and image for the company has an important meaning for the success of Vinamilk.More than 30 years of developing, some goods such as Ong Tho condensed milk, Dielac, Vinamilk yogurt are prevalent brand.
“Vina” in the word Vinamilk means Viet Nam-country of origin This name creates a sense of friendliness and is easy to remember Besides, Vinamilk’s images are associated with green grasslands ,sunny fields and funny cows
Packaging contributes to buying decisions so the company has focused on designing the catchy package with necessary information on the labels (ingredients, instructions, expiration date) Besides, the capacity of each product’s type is also diversified to easily meet different using purposes of consumers In the environmental perspective, Vinamilk has developed packages that are environmentally friendly by using paper boxes, supplied by Tetra Pak, for entire liquid dairy products and beverages
The systems for packaging pasteurized dairy products ensure the three main objectives of the packaging process as: guaranteeing product quality, eliminating wastage, and lowering distribution costs
Vinamilk provides an official website to interact with customers Customers have handy access to get the information such as the amount of nutrients in each product Recently, its distribution network entitled “Vietnamese Dairy Dream” reached the threshold of 500 stores in all 63 provinces and cities The retail website www.giacmosuaviet.com.vn is also proving to be effective, especially during the social distancing period.
From 1976 - the year of being founded, Vinamilk has spent many landmarks from the beginning for maturation and development like today Recently, it can be seen that Vinamilk is in the maturity stage
According to Vinamilk’s financial report, growth remains stable in the first quarter of 2021 In the last quarter of 2020 and the first quarter of 2021, Vinamilk’s revenue respectively was more than 2,6 thousand billions vnd and about 3,15 thousand billions vnd.
Because of the difficulties of economy in recent years, Vinamilk has to face many challenges to adjust its pricing strategies properly.
Nowadays there are many businesses in the same market segments so competitive prices affect a lot on selling product of Vinamilk Therefore, Vinamilk has taken competitive-based pricing methods Vinamilk focuses on producing high quality goods but still sets its products at competitive prices In that sense, the pricing strategies of Vinamilk are not only ensuring the profit, but also maintaining the purchasing ability of consumers.
The company owns dairy factories with large capacity, advanced technology, fully automatic can which make costs reduce significantly and ensure the product quality Besides, the company’s long experience in the industry contributes to cheap material costs and leads to competitive prices of the product These are prices of some products:
Table 7: Prices of some products Product: 100% fresh milk
Sure Prevent Gold (powdered milk for elder)
Optimum Gold(powerdered milk for baby)24 milk)
VND 244.000 for 400gram/tin can
VND 28.000 for a loc of 4 boxes
VND 213.000 for 400gram/tin can
Besides product lines of yoghurt and condensed milk, which overwhelm the market, the others face the drastic competition with other domestic dairy producers.
In that circumstance, pricing is one of the crucial strengths of Vinamilk to compete with its rivals Compared to its competitors’, there is no huge difference, especially in the liquid milk sector For example, Vinamilk’s price of a 1-liter fresh milk box is about 30 500 VND, while the same product type of other companies (TH True Milk, Lothamilk, or Dutch Lady) range from 27 600 - 34 000 VND.
When publishing new products to the market, Vinamilk chooses market- penetration pricing In order to make sure new products adapt to customers quickly and deeply, Vinamilk set a low initial price VNM Green farm is the newest liquid milk product and its price is 32,340 VND for a lot of 4 boxes With this affordable price,Green farm has quickly consumed and become family’s favourable product.
Product line pricing: Vinamilk focuses on developing their product lines and sets the price steps between some various products in a line This helps customers make suitable choices that fit their demands In the powdered milk line, Vinamilk offered Dielac Grow Plus and an upgraded version of it- Grow Plus with Bird’s nest and we can see a price step between them.
Product bundle pricing: Vinamilk combines some products with other products and offers this bundle at a reduced price to encourage purchases of consumers.Vinamilk sells combo of for Ridielac cereal with 4 different flavors.
Promotion
Promote marketing campaigns even further or come up with fresh creative ideas to sell items and leave a lasting impact on customers With the complex condition of the COVID-19 epidemic, for example, "buying online" has become a popular trend As a result, Vinamilk needs to push the campaign for consumers to buy milk online, emphasizing on health concerns, the danger of disease transmission, and time savings, particularly social distance Implementing preferential policies such as purchasing big quantities of items, purchasing goods with presents, using promotion codes, etc.
Place
- Urban: Residents have convenient, time-saving habits and require a high level of safety, so distribution on credible supermarkets and distribution channels, especially genuine online websites (for With the current situation of the COVID-19 epidemic, this place will consume very high products)
- Rural: According to surveys, the majority of individuals in this area prefer to buy through traditional methods As a result, to successfully reach the rural market, a distribution system at wholesale marketplaces or agents in important residential regions is required.
1 Vietnam population portal https://danso.org/
2 Website of Vinamilk https://www.vinamilk.com.vn/vi
3 Analyze the impact of the micro and macro environment on the business activities of the company https://123docz.net/document/2561845-phan-tich-su-tac-dong-cua-moi-truong-vi- mo-vi-mo-den-hoat-dong-kinh-doanh-cua-cong-ty-co-phan-sua-viet-nam- vinamilk.htm
4 Some solutions to promote Vinamilk’s liquid milk market
Vinamilk truong hoangthuyminh qtkd_2008 (slideshare.net)
5 Analysis of vietnam’s dairy market in recent years https://www.slideshare.net/trongthuy2/luan-van-phan-tich-thi-truong-san-pham-sua- tai-viet-nam-hay
6 Vinamilk’s competitive strategy http://www.ceo360.vn/hoc-tap-chien-luoc-canh-tranh-cua-vinamilk-de-vuon-tam- the-gioi/
7 Microsoft Word - Thesis (Final).docx (theseus.fi)
8 Analyze the marketing strategy of Vinamilk dairy company
(15) (DOC) b PHÂN TÍCH CHIÊN LƯỢC CHIÊU THỊ CỦA CÔNG TY SỮA VINAMILK | Ngọc Dung - Academia.edu
9 Vietnam economic and financial information channel https://cafef.vn/