marketing stategy of vinamilks yogurt products

Through the process of researching businesses, we learned that Vinamilk is the leading dairy company in Vietnam, so the company has to face the fiercest competition in the dairy mdustry

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INTRODUCTION Why choosing the topic:

Milk is a nutritional supplement that is almost indispensable in every family Milk provides nutrients and energy suitable for almost all ages, all stages of human development from infants, children, adolescents to the elderly can be used Nowaday in Vietnam, most families also use yogurt, fermented milk daily in life to replace meals when needed or supplement with digestive enzymes

Vietnam's dairy market is increasingly competitive with domestic enterprises Therefore,

in order for dairy businesses to be able to stand firm in the current dairy market, they must clearly define their goals and directions, map out a reasonable path and allocate resources in an optimal way to ensure achieve the goal Through the process of researching businesses, we learned that Vinamilk is the leading dairy company in Vietnam, so the company has to face the fiercest competition in the dairy mdustry in general between domestic and international competitors

Firstly, to answer the question of how they have used campaigns and strategies to reach markets and consumers so that they can thrive and sustainably in the face of such pressures Secondly, because Vinamilk's products are very diverse, we decided to choose one product branch for research, which is yogurt Summarizing the above factors, we have chosen the topic "Marketing Strategy of VINAMILK's Yogurt Products” Research objective:

- Analysis of factors affecting the development environment of Vinamilk

- Understand the Marketing strategy and factors affecting the yogurt product strategy of Vinamilk

- Proposal to develop yogurt products of Vinamilk company

1 VINAMILK INTRODUCTION

VINAMILK is a leading nutrition group in Vietnam, has been operating and developing for more than 40 years, present in more than 30 countries and achieving 18.000.000 consumed products/day Despite being present in the Vietnamese market for a long time, Vinamilk's position in country's dairy industry has not been defeated The Vietnam Dairy Products Joint Stock company is currently supplying more than 200 dairy products and products and is divided into 4 groups of core dairy products such as liquid milk and powdered milk, fresh milk and condensed milk to value-added dairy products such as, yogurt drink and spoon, ice cream, cheese and healthy drinks

Despite being affected by COVID-19 in 2020, Vinamilk has updated its business strategy and continues to provide high-quality and innovative products to consumers

In 2020, Vinamilk's consolidated net revenue and profit after tax were VND 59,723 billion and VND 11,236 billion, respectively, up 6% and 6.5% compared to 2019

59.72 52.63

51.14

= 50 46.97

40.22 35.19 31.59

Total revenue of Vietnam Dairy Products JSC from 2013 to 2020

(Source: statista.com) 1.1 The company

Vietnam Dairy Products Joint Stock Company was established on Decision No 155/2003 QD-BCN dated October 10

In 2003, the company was transformed into Vietnam Dairy Products Joint Stock Company with business registration certificate number

4103001932 was issued by the Department of Planning and Invested Before December 1, 2003, the Company was a State-owned enterprise under the Ministry of Industry

Company name Vietnam Dairy Products Jomt Stock Company

1.2 Company history and yohurt product develop

1.2.1 History

The company was established in 1976 as the state-owned Southern Coffee- Dairy Company Below are Vinamilk's development stages in the equitization period:

- 2003: The Company was formally transformed into a joint-stock company

in November, 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 are paving the path for the high-end organic food market in Vietnam Angkormilk Dairy Factory in Cambodia is the first dairy factory in a foreign country

- 2017, The first European standard 100 percent Organic Fresh Milk produced was launched in Vietnam

- 2018, Vinamilk was the first company in Vietnam to introduce 100 percent A2 Fresh Milk

- 2019, Inaugurated Vinamilk Tay Ninh dairy cow “Resort”, and officially confirmed to own the Global G.A.P Standard Farm System Asia's largest in terms of number of farms

1.2.2 Yohurt product history and develop

In 1993, Vinamilk officially launched the first yoghurt that was industrially produced in Vietnam In 1993, Vinamilk's yogurt production capacity was 6000 jars/hour and 120,000 jars/day In 2013, Vinamilk produced 6.5 million jars of yoghurt every day

Nowaday, Vinamilk has 11 yogurt production facilities Types of yogurt: eatable yogurt, pasteurized, fermented, fresh drinking yogurt and fruit yogurt Classified clearly as yogurt for families, children, woman

1.3 Achivements and Awards

- 2012 - 2020, Vietnam value (Ministry of Industry and Trade)

- 2013 - 2020, 50 Best listed businesses in VIETNAM (Forbes magazine) and Top 500 biggest private enterprises in VIETNAM (Joint Stock Company Assessment Report VN)

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

1.4 Message of Vinamilk

Vision

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

“Vinamilk is committed to

providing the community

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with top quality and high- quality nutrition with its own respect, love, and responsibility for human life and society.”

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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 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

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 and inventiveness Customers are at the heart of Vinamilk's business, and the company is dedicated to serving all of their demands

2 THE MARKETING ENVIRONMENT

2.1.1 Public

o Local public and government public

The business’s face in the eyes of the community and government has impacted the ability of the organization to achieve its goals Being trusted

by a local community will help the company's sales increase with more people buying products, the company's reputation is enhanced when accompanying the government to participate in community development projects Although still affected by the COVID-19 pandemic, Vinamilk has launched lots of campaigns that show its responsibility to the community It has demonstrated Vinamilk's position and long-term vision on its development path By the end of 2020, some campaigns such as:

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- Vinamilk has accompanied the Government in the fight against Covid-

19 and supported the front-line forces with a total donation of nearly VND 40 billion

- 1.7 million glasses of milk were brought to 19,000 disadvantaged children nationwide by Vinamilk and the ‘Stall Tall Vietnam’ Milk Fund with the message "For the children’s health and safety - preventing Covid-19"

- Vinamilk & the ‘One Million Trees for Vietnam’ Fund have completed the set target with 1,121,000 trees planted

These actions make a great impression on the community As they stay home, care more about their health during the pandemic It promotes an increase in people’s demand for healthy products from Vinamilk

o Internal public

Under the common challenging conditions, Vinamilk has strived to do well

in protecting the health and wellbeing of the entire staff, by giving pandemic prevention regulations and guidance, building a safe working environment and offering the Company's nutritional products to enhance the immunity of employees The company has also ensured income and welfare for employees by maintaining the normal salaries, working hours and benefits even during working-from-home periods under social distancing With these efforts, Vinamilk continued to be voted as the best to work in Vietnam for the third consecutive year and recorded an employee satisfaction index of over 90% When employees feel good about their company , this positive attitude will move to the external customers ' company

2.1.2 Customer

- Most of Vinamilk's products are healthy, so Vinamilk's customers are also very diverse Special customer groups such as hospitals, restaurants, hotels and companies; the school group, in particular, is focused on and has grown

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stronger thanks to the Company’s active participation in the National School Milk program

- Reseller market: Present at most supermarkets and convenience stores across 63 provinces

- International market: Some positive news from the Chinese market Following the launch of the Vinamilk brand in China in September 2019, Vinamilk continued to make many positive developments, starting with the export of Ong Tho Condensed Milk in April 2020 in just two months after obtaining the export code, followed by the receipt of the export code for yogurt and liquid milk and the certification of Truong Tho Factory to China’s Organic standard, opening up great opportunities for Vinamilk to conquer this potential, huge market

2.1.3 Marketing intermediaries

Vinamilk stores: the "Giac Mo Sua Viet" store chain has increased to 465 stores following the Vinamilk report 2020 The e-commerce channel has also been optimized to diversify distribution channels and make the shopping experience more convenient Contributing greatly to bringing Vinamilk's milk brand across Viet Nam

2.1.4 Suplier

Currently, Vinamilk is managing 83 raw milk collection stations nationwide, with a total herd of more than 100,000 cow heads under the care of farming households, supplying over 600 tons of raw milk per day The vinamilk relationship with suppliers, local farms, is very close The collection stations, along with the main task of purchasing raw milk, also support farmers in every matter of dairy farming such as feed distribution, after-milking cleaning, technology transfer and disease control So the quality of raw milk is good from the suppliers, it contributes to adding to the value chain

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Vinamilk is the first Vietnamese company to import purebred A2 dairy cows from New Zealand This is an effort to expand and diversify dairy herds to serve the increasing needs of Vietnamese consumers

in 2020, statistics from world bank Thus, there are many competitors with Vinamilk in the industry These competitors such as: FrieslandCampina, TH True Milk, Abbott, Nutifood, Moc Chau Milk, Vinasoy

By the end of 2020, it is estimated that Vinamilk will hold the highest market share in the dairy industry with 43.3%, behind Vinamilk is FrieslandCampina with 15.8%, the rest of other businesses hold less than 10% of the market share

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2.2

In the powdered milk segment, there is strong competition from VitaDairy,

or Nutifood In 2019, VitaDairy is the first company to exclusively import ColoslgG24h colostrum to Vietnam to supplement IgG antibodies for

formula milk

Specially, Vietnam’s dairy market in the period of 2019 - 2020 witnessed two large-scale merger and acquisition cases when Moc Chau Milk (MCM) became a member of Vinamilk and International Dairy Products (IDP) was acquired by Blue Point JSC Viet Nam's merger between Vinamilk and Moc Chau Milk helps the company expand its scale and increase its competitiveness with rivals

The macroenvironment

2.2.1 Political environment

Traditional powdered milk products are facing challenging market conditions due to the government’s restrictions on advertising for children under 2 years old, a tendency to favor breast milk and a consumption shift

to ready-made milk or 100% fresh milk

2.2.2 Economic

As part of the EVFTA, which took effect from August 2020, in the next 3-5 years, Vietnam will reduce import duties on dairy products from Europe to 3.5%-0% from the current 5%-15% This will make the dairy market more competitive as it is beneficial for imported milk from Europe, but at the same time will motivate domestic dairy companies to increase their capacity to provide higher quality products to the market In addition, some domestic dairy companies are importing raw milk powder from Europe, so

a tax reduction will help these companies improve their profit margins

In 2020, consumer demand was also affected as 32.1 million people nationwide were badly affected by the pandemic and the average income of

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employees fell by 2.3% (General Statistics Office) Accordingly, the FMCG (Fast - moving - consumer - food) sector recorded a 7% decrease in value and a 6% decrease in the dairy industry (AC Nielsen)

2.2.3 Natural Environment

Land is a crucial material for the Company's production and business activities, so the Company has paid close attention to assessing impacts of dairy farming on properties of the soil and implemented a sustainable land management circle

Under impacts of climate change, deforestation, pesticide abuse and water pollution, Vinamilk has implemented various strategies, such as converting animal waste into organic fertilizers to replace chemical ones and applying the Japanese practices of crop cultivation, with superior benefits of soil protection and enrichment, are being deployed on many of Vinamilk's farms Results show that on VietnamDairy Cows farms, corn yield and Mombasa grass yield have increased by 34% and 12% respectively compared to 2019

2.2.4, Technological environment

The application of the circular economic model in the biogas system which turns waste into resources and sustainable land management circle at vinamilk dairy farms Vinamilk's farms have been operating as organic farms with support from advanced technologies and agricultural best practices such as crop rotation and optimization of manure as fertilizers Vinamilk applied energy-saving technologies with led lighting systems which respond automatically to the active hours of cows in each bam Besides that, by the end of 2020, solar panels have been installed in 05 farms: Binh Dinh (2.96 MWp), VNM Da Lat (2.06MWp), Organic

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Evaluation:

Vinamilk has a large market share in Vietnam's dairy industry at present, the chain of retail stores "Vietnamese Milk Dream" has spread across the country, and electronic sales sites (eshop Giac Mo Sua Viet) have developed, which have shown the sustainable development of the company

In particular, the continuous improvement of supply customer needs such as importing new purebred A2 dairy cows shows that Vinamilk is always ready to provide the best things to meet customer needs Besides, the company applies information technology in factory system management, digital contract signing, remote working system (eOffice) Thus, responding

to challenges from the pandemic, social isolation, interrupted supply chain, Vinamilk still operates stably, ensures jobs for employees, and continues seeking to sign electronic contracts with partners The company's net profit

in 2020 was up 6% compared to the previous year The pandemic is also a jump step, the distance between competing companies will change a lot if any company adapts quickly, and applies technology effectively In addition

to its development, Vinamilk launched community projects, which helped

to increase the company's reputation and the brand With the changes in shopping behavior The company should continue to advance electronic payment services, build more discount combo packages for consumers to choose The ability of employees to work online has improved, the company can distribute some tasks for employees working at home, which

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help to reduce travel time costs for employees However, managing employee productivity at home is also a challenge for the company

^ Being the largest dairy

Uh liar cc enterprise in Vietnam with a

04, D; market share of 43,3%, of

` which it holds 54,5% market

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84,7% market share edible

84 oc 30, : yogurt Therefore, Vinamilk

has the ability to set the selling price in the domestic market

Vinamilk yogurt market share (Source: Yogurt price list in May 2020) Vinamilk was voted by consumers as “Top 10 High Quality Vietnamese Goods” from 1995 to 2009

o Product quality:

Food to promote health and prevent disease

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