mid term assignment principles of marketing marketing plan for nutifood after covid 19 pandemic in 2023

Especially, theywere honored as the National Brand and owned a factory named NutiFood Sweden AB inSweden Until now, NutiFood has been famous for powdered milk products for children of al

VIETNAM NATIONAL UNIVERSITY - HO CHI MINH CITY

UNIVERSITY OF ECONOMICS AND LAW

MID-TERM ASSIGNMENT

PRINCIPLES OF MARKETING

MARKETING PLAN FOR NUTIFOOD AFTER COVID-19 PANDEMIC IN 2023

Lecturer: Ms Nguyễn Hồng Uyên

Member’s Identification:

Numbe

Ho Chi Minh City, April 2022

Table of Contents

I EXECUTIVE SUMMARY 3

II MARKETING SITUATION 3

1 Current marketing situation 3

1.1 Market Description 4

1.2 Product Review 5

1.4 Distribution Review 10

1.4.1 Domestic distribution 10

1.4.2 Foreign distribution 10

2 SWOT ANALYSIS 11

III MARKETING STRATEGY 12

1 Objectives and Issues 12

2 Marketing Strategy 12

2.1 STDP 12

2.1.1 Segmentation 12

2.1.2 Targeting 13

2.1.3 Differentiation 13

5.1.4 Positioning 13

2.2 Market Research 15

IV ACTION PROGRAM 15

4.1 Detailed tasks 15

I EXECUTIVE SUMMARY

In Vietnam, the dairy industry is one of the most demanding industries, leading to the competition between brands like VinaMilk, TH TrueMilk, Milo, and Ovaltine We can see that Nutifood brand is a top business with great efforts and recognition from the customers They provide many familiar products such as Nuti IQ, Nuvita, Enplus, Slimmax, etc

NutiFood was founded in 2000 by a group of doctors and nutritionists In the beginning, the group of Nutifood's products included nutritious such as powder for kids, milk powder and food The company extended a professional distribution system in many provinces and cities because they wanted to get a high market share in the dairy industry In 2018, the company became the top 3 most prominent companies in Vietnam with 5,300 workers Especially, they were honored as the National Brand and owned a factory named NutiFood Sweden AB in Sweden

Until now, NutiFood has been famous for powdered milk products for children of all ages Understanding the resources that businesses currently have, along with the analysis of opportunities and challenges in the industry, NutiFood needs to have a plan in 2023 to increase its brand awareness of customers and competitive position in the market, growing loyal customers The marketing plan is implemented from March 2023 to August 2023 After that, we will summarize the achieved results in October 2023 The details of the plan are mentioned in the following sections

II MARKETING SITUATION

1 Current marketing situation

Struggles in many manufacturing industries and FMCG particularly has been witnessed since the exploitation of the COVID-19 pandemic However, milk and dairy products seem to be less impacted Milk consumption increased by 10% in urban areas and 15% in rural areas Dairy product sales in Vietnam reached 64.4 trillion VND in 2020, representing a 10.3% increase from the previous year Milk and dairy product sales in Vietnam are expected to grow at a 7-8% annual rate between 2021 and 2025, reaching a total value of approximately 93.8 trillion VND

by 2025 (Vietnamcredit)

Figure 1: Revenue structure of Vietnam’s dairy market

Source: Euromonitor, 2020 Although competition in Vietnam’s milk market share is more intense, Nutifood market remains substantial with annual revenue growth of more than 250 percent Nutifood's brand value was 93.9 million USD as of December 2020, making it to be the third-largest dairy company in Vietnam

1.1 Market Description

 Nutifood’s market includes consumers and business users:

+ B2C market: Supply products for consumers who have young children and want to provide nutritious milk for enhancing their child’s growth or the youth wanting to have delicious drinks

+ B2B market: Supply products for supermarkets, grocery stores, hospitals, restaurants, hotels and food & beverages companies…

 Nutifood’s specific segments being targeted include parents, young children, companies and medical users

Table 1: Need & Corresponding features/benefits Nutifood

Features/Benefit

Parents (consumer market) nutritious milk for enhancing

their child’s growth Having many products for each desire for their child’s

growth + For malnourished children: NutriGrowPlus

+For stimulating brain development: Nuti IQ Gold +…

Young children & students

(consumer market) Delicious drinks Having many products with variety of taste:

+ Nuti soymilk + Nutifood UHT milk (Chocolate, Vanilla, Strawberry) +…

Foods & Beverages

companies, restaurants …

(business market)

Milk and dairy’s products demand, ingredients of their products

Having fresh milk and sweetened condensed milk

Medical users, hospitals

(business market)

Milk as treatment/therapy Having products line for

diabetes and malnourished problems

1.2 Product Review

The main products of Nutifood are powdered milk and liquid milk, value-added products such as condensed milk, yoghurt Nutifood divides its product portfolio into 3 main groups to serve different customers:

1.3 Competitive Review

Vietnam’s dairy & milk market share is intensively competitive, Nutifood has many strong competitors from domestic enterprises such as: Vinamilk, TH True Milk, Moc Chau Milk

to international competitors: Dutch Lady, NESTLE, Abbott, FrieslandCampina… According to SSI estimated in 2020, Vinamilk captured the highest Vietnam’s milk market share with 43,3%, FrieslandCampina ranked second with 15,8% market share and Nutifood ranked third with 7,1% The rest were Vinasoy 6,2%, TH True Milk 6,1%, Abbot 5%, Moc Chau Milk 2,1% and others 14,3% respectively

=> Although competition is fierce, Nutifood was the third largest dairy company in Vietnam

Figure 2: Vietnam’s milk markets share in 2020 Source: Euromonitor, 2020

- However, in infant formula and ready-to-drink infant formula market share, Nutifood

GrowPLUS+ continues to maintain its position as the No 1 baby milk brand in Vietnam for three consecutive years (2016-2021) according to Nielsen (Vietnamnet)

Table 2.1 Nutifood GrowPlus+ competior’s products & pricing

Competio

Vinamilk Dielac Grow,

Dielac Grow+

Boosting cognitive growth and Stimulating bone and height development

265,000-350,000 VND/900g

Abott Abbott Grow helping children develop well physically,

in weight and brain

290,000-389,000 VND/900g

Friso Friso Gold &

Frisolac Gold

building and developing physical as well

as intelligence for children

416,000-599,000 VND/900g

1.4 Distribution Review

1.4.1 Domestic distribution

Nutifood’s distribution network plays an indispensable role to compete with other strong competitors Nutifood has a large distribution network that spreads over 64 provinces and cities across the country, significantly approach popular products to consumers:

+ Retail Channel: Currently, Nutifoods has more than 96 distributors and over 60,000 points of sale, retail stores and grocers that stretch across the country

+ Supermarket Channel: Nutifood's products have been distributed in supermarkets chains nationwide such as Coop mart, Metro, GO!,Vinmart, Citimart… and convenience stores chains including B'mart, Circle K, Family mart… This channel has the strongest impact on spreading Nutifood’s products, increasing brand awareness

+ Ecommerce Channel: Consumers can easily buy Nutifood’s Products via ecommerce sites such as Shopee, Tiki, Lazada…

1.4.2 Foreign distribution

- In January 2018, Nutifood was certified by the FDA and signed a cooperation agreement with Delori to export the product Pedia Plus, a special treatment product to the US market The BASF group cooperation company (Germany) introduced an advanced source of HMO nutrition into nutritional milk for children on the 11th of the same year

- A 20 million USD dairy factory in Sweden was operational at the end of May 2019 To bring products to the international market, the company also forms joint ventures with Japanese and American corporations

- In June 2019, Nutifood exported more than 2 million units of pasteurized drinking yogurt to the US market

- On October 15 2020, Nutifood announced that its soymilk products are now available in

450 Walmart supermarkets across China, becoming the first Vietnamese milk brand sold in Walmart

=> Strengths: With large distribution not only domestic but also foreign, consumers can easily find and buy Nutifood’s products

2 SWOT ANALYSIS

Strengths

Wide distribution network in both domestic and

foreign

Possessing strong financial resources and

high-quality human resources

Good facilities and modern technology, equipment

Professional and reputable market research,

marketing strategy

Variety of high-quality products at a reasonable

price

Weaknesses

The farm scale in Vietnam is not large enough to provide production, some raw materials are not available but to export from foreign

Brand awareness and image is not popular compared to other competitors

Product communication management on social networking sites is not really good

Opportunities

Vietnamese people are willing are willing to pay

more for high-quality products, especially products

for their kids

Despite the volatile epidemic situation, dairy

products & milk market is steadily growing

Vietnam's milk market is very potential as the milk

consumption of Vietnamese people compared to the

world is still quite low, about 15 litters/person/year

Cooperating with HAGL group to produce

materials

Threats

Intense competition from domestic enterprises (Vinamilk, TH True Milk,…)

to foreign companies (Abbott, Nestle…) Unstable economy makes it difficult for doing business activities, especially in COVID-19 pandemic

Price of milk market is continually fluctuating

III MARKETING STRATEGY

1 Objectives and Issues

- In 2025, increase dairy market share in Vietnam to 12%.

- In 2030, build 6 new factories in Indonesia, India, and Thailand

- In 2027, establish 15 branches across Asia’s major markets: China, Malaysia, Korea, Japan, Taiwan,…

2 Marketing Strategy

2.1 STDP

2.1.1 Segmentation

Nutifood has divided its target customers in to 3 groups according to ages, special dietary requirements and pathologies

1 The company used age groups to divide the market into smaller segments to best formulate products suitable for their nutritional needs:

 Nutritional segment for infants from 0-6 months old

 Nutritional segment for babies from 6-12 months old

 Nutritional segment for toddlers from 1-3 years old

 Nutritional segment for children from 4-6 years old

Parents with children in each growing state as mentioned above are customers seeking well-rounded nutritional solutions to support their kids’ intellectual and physical development

1 Pathologies and the elderly segment include buyers who demand products that are tailor-made for their health and illness conditions Nutifood combined age and benefit sought criteria to further separate this segment into smaller ones with more specific

characteristics:

 The diabetic consumer group seeks supplementary dairy products that offer low glycemic index (GI), contain unsaturated fatty acids, immune system boosting, good for cardiovascular health to stabilize blood sugar levels

 The ill and elderly group consists of pre/post-surgery patients and the older population who require easily digested milk aiding swift recovery as well as maintaining perfect health

 Lastly, Nutifood targets customers with specific nutritional demands such as high calcium, weight loss weight control for obese children, malnourished adults, and pregnant, breastfeeding women The company aims to satisfy these women who benefit from complete source of necessary nutrients to optimally nourish their child and ensure the best pregnancy health

needs (adults) Pathologies and elderly

Demographic

Income None, pocket money Low, middle, and

high Low, middle, and high Occupation Kindergarten and

primary school Working retiredWorking and

Psychographic Personalities Energetic, curious,

cheerful, creative Family-oriented, active, calm Often get anxious and stressed Lifestyle Gregarious, outdoor- Busy with work Health-conscious,

loving and family, care

about their conditions

reduced appetite, focus on living quality

Behavioral

Benefit

sought

Nutrients that promote their growth, delicious flavors, reasonable price, weight gain/loss

Specialized formulas according to health demands

Health benefiting, low GI, strengthen immunity

2.1.2 Targeting

Nutifood initially targeted young children segment, but as the market grew, they soon expanded product lines to meet the diverse needs of various segments Therefore, the

differentiated marketing strategy is implemented to design appropriate marketing programs

for each segment

Young children are the most profitable customer group since they account for approximately 23.2% of Vietnam’s total population (Statista, 2020) and consume dairy products

on a regular basis Their parents are apprehensive about their children being stunted and anorexic, understanding this, Nutifood introduced Grow Plus+, Pedia, Riso Opti Gold, formulated by top nutritionists from Vietnam and Sweden exclusively for Vietnamese children According to research conducted by Vietnam National Institute of Nutrition, up to 20.9%

of adult from 25-64 are classified as malnourished Especially elderly people and patients suffering from reduction in appetite, impeding them from obtaining vital micronutrients, further aggravating these consumers’ vulnerable health These customers’ conditions require products that provide ample amount of nutrients that their diet is lacking with high absorption rate which Grow Plus+ Diamond, EnPlus and Dr Luncen satisfy

2.1.3 Differentiation

(a) Products

Nutifood differentiates its products from other competitors with the slogan “Nutritional solutions from experts” Every product is the result of Nutifood elite experts’ relentless effort and application of advanced science followed by European quality-control standards In 2021, Nutifood collaborated with BASF to be the first Vietnamese dairy corporation to include Human Milk Oligosaccharides (HMO) in their products Furthermore, Nutifood Nutrition Research Institute in Sweden discovered the exclusive FDI formula which fosters “Strong immunity & Good digestion”, the pillars for the complete development of children

(b) Channels

Nutifood has three distribution channels: dealers, supermarkets, and schools For the supermarket distributors, Nutifood’s products can be purchased at large supermarkets (Coopmart, BigC, Metro, Citimart, ,) and convenience stores (Family Mart, B’smart, Vinmart, Satrafood,

…) Dealers are Nutifood’s main selling channel, with 96 distributors are >60,000 retailers across 63 provinces Lastly, Nutifood sells directly to over 1,200 kindergartens and primary schools at 26 provinces (Nutifood, 2021) This widespread reselling system and effective use of online shopping platforms (Lazada, Tiki, Shopee,…) enables Nutifood to cover every market corner, attract new customers and gain market share

2.1.4 Positioning

(a) Perceptual Map: Market Share and Brand Awareness