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 AFTERCOVID-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

III MARKETING STRATEGY 12

1 Objectives and Issues 12

I EXECUTIVE SUMMARY

In Vietnam, the dairy industry is one of the most demanding industries, leading to thecompetition between brands like VinaMilk, TH TrueMilk, Milo, and Ovaltine We can see thatNutifood brand is a top business with great efforts and recognition from the customers Theyprovide 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 andfood The company extended a professional distribution system in many provinces and citiesbecause they wanted to get a high market share in the dairy industry In 2018, the companybecame the top 3 most prominent companies in Vietnam with 5,300 workers 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 allages Understanding the resources that businesses currently have, along with the analysis ofopportunities and challenges in the industry, NutiFood needs to have a plan in 2023 to increaseits brand awareness of customers and competitive position in the market, growing loyalcustomers The marketing plan is implemented from March 2023 to August 2023 After that, wewill summarize the achieved results in October 2023 The details of the plan are mentioned in thefollowing sections

II MARKETING SITUATION

1 Current marketing situation

Struggles in many manufacturing industries and FMCG particularly has been witnessedsince the exploitation of the COVID-19 pandemic However, milk and dairy products seem to beless impacted Milk consumption increased by 10% in urban areas and 15% in rural areas Dairyproduct sales in Vietnam reached 64.4 trillion VND in 2020, representing a 10.3% increase fromthe 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 VNDby 2025 (Vietnamcredit)

Figure 1: Revenue structure of Vietnam’s dairy market

Source: Euromonitor, 2020Although competition in Vietnam’s milk market share is more intense, Nutifood marketremains substantial with annual revenue growth of more than 250 percent Nutifood's brandvalue was 93.9 million USD as of December 2020, making it to be the third-largest dairycompany 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 ascondensed 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 manystrong competitors from domestic enterprises such as: Vinamilk, TH True Milk, Moc Chau Milkto international competitors: Dutch Lady, NESTLE, Abbott, FrieslandCampina… According toSSI 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 others14,3% respectively

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

Figure 2: Vietnam’s milk markets share in 2020Source: 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 threeconsecutive years (2016-2021) according to Nielsen (Vietnamnet)

Table 2.1Nutifood 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 strongcompetitors Nutifood has a large distribution network that spreads over 64 provinces and citiesacross the country, significantly approach popular products to consumers:

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

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

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

1.4.2 Foreign distribution

- In January 2018, Nutifood was certified by the FDA and signed a cooperationagreement with Delori to export the product Pedia Plus, a special treatment product to the USmarket The BASF group cooperation company (Germany) introduced an advanced source ofHMO 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 Tobring products to the international market, the company also forms joint ventures with Japaneseand American corporations

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

- On October 15 2020, Nutifood announced that its soymilk products are now available in450 Walmart supermarkets across China, becoming the first Vietnamese milk brand sold inWalmart

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

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 theworld 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 Strategy2.1 STDP

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 glycemicindex (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 highOccupation 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 soonexpanded 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 forapproximately 23.2% of Vietnam’s total population (Statista, 2020) and consume dairy productson a regular basis Their parents are apprehensive about their children being stunted andanorexic, 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 patientssuffering from reduction in appetite, impeding them from obtaining vital micronutrients, furtheraggravating these consumers’ vulnerable health These customers’ conditions require productsthat provide ample amount of nutrients that their diet is lacking with high absorption rate whichGrow Plus+ Diamond, EnPlus and Dr Luncen satisfy

2.1.3 Differentiation

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

(b) ChannelsNutifood has three distribution channels: dealers, supermarkets, and schools For thesupermarket 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 retailersacross 63 provinces Lastly, Nutifood sells directly to over 1,200 kindergartens and primaryschools at 26 provinces (Nutifood, 2021) This widespread reselling system and effective use ofonline shopping platforms (Lazada, Tiki, Shopee,…) enables Nutifood to cover every marketcorner, attract new customers and gain market share

2.1.4 Positioning

(a) Perceptual Map: Market Share and Brand Awareness

The criteria for this map are brand awareness and market share As illustrated, Nutifoodalthough is an experienced brand, only accounted for 7.2% of Vietnam’s milk market share(Euromonitor, 2020) and scored 79% in terms of awareness (B&Company, 2021) Compared toVinamilk, whose figures were 43.3% and 95%, respectively, Vinamilk was the leader Taking thesecond place was Dutch Lady with 15.8% market shares and 80% on consumer recognition.

(b) Value Proposition

Source: Kotler & Armstrong, Principles of Marketing

In the same for less proposition, customers get reasonable health-supporting products atan affordable price point Nutifood 1 liter fresh milk is charged at 32,000Vnd/carton, cheaperthan competitors like TH True Milk (37,000Vnd/carton), Dutch Lady (35,000VND/carton) andforeign brand Meadow Fresh (55,000Vnd/carton) In return, nutritional values per 100ml areaverage with Protein 3.1g, Calcium 110mg, and Fat 3.5g, inferior to its high-end competitorMeadow Fresh (Protein 3.5, Calcium 120mg, Fat 3.3g) Using price and quality as majorcompetitive advantage, Nutifood is particularly well received and trusted among low-mediumincome consumers in rural areas

2.2 Market Research

Every company conducts marketing research to better understand the current marketsituation they are facing regarding customer level of satisfaction and brand association, trendsand opportunities affecting new product launch, design better products for targeted markets,devising a suitable strategy to attract profitable leads,… and Nutifood is no exception

Descriptive research and Exploratory research are the main instruments helping Nutifoodexplore the potential for a new product as well as customer attitudes towards the company’sofferings With over 20 years of experience in community nutrition care, Nutifood carried outmultiple in-person interviews and clinical examinations for over 250,000 cases (Nutifood, 2021).The primary data collected provided profound insights about Vietnamese particular physicalconditions for the brand to formulate products fitting their taste and price concern Additionally,Nutifood uses online marketing research, mainly behavioral targeting They also gatherinformation by tracking consumers’ online behavior from the official website and third-partywebsite, obtained data is used ethically for the purpose of improving products quality, promotioncampaigns, discounts, promotions, etc for the targeted market

IV ACTION PROGRAM

4.1 Detailed tasks

Market research 8/3/2023

–28/3/2023

Market survey -> figure out customer needs -> provide lists of target customers and competitors

15.000.000

Sponsoring programs about Mothers and Babies "When GenZ becomes a mother"

01/04/2023– 15/04/2023

Share the thoughts and feelings of young people of the GenZ generation whenbecoming a mother, and share the secret to choosing milkand food to ensure nutrition for the baby

150.000.000 VND

Marketing

Product market expansion, brand positioning

17/05/2023– 02/06/2023

Bringing products to largeand small stores,supermarkets, groceries to expand the market, customers can easily access, and build a big brand in the field

200.000.000 VND

Marketing