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MARKETING PRINCIPLES GROUP ASSIGNMENT

Class: MKT1613

Lecturer: Tran Dieu Thuy

Group 6 : Quach Hang Nga - HS163381Tham Tram Anh - HS160912Nguyen Thi Thuy Hang - HS160772Dang Huu Dang - HS160836Nguyen Duy Nam - HE151395

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TABLE CONTENT:

I, Introduction: (Quách Hằng Nga)- Short prỏle of Vinamilk & product

- The product9s STP (Segmenting – Targeting – Positioning) of Vinamilk

II, Business environment analysis

1. Macro environment ( Đặng Hữu Đăng )2. Micro environment: ( Nguyễn Thị Thúy Hằng )

- Market overview- Customer analysis

- Competitor analysis (2 direct competitors)- Other factors (supplier, intermediaries, publics…)

III, The company9s current Marketing Mix - 4Ps: (Thẩm Trâm Anh)

IV, Conclusion & Recommendations ( Nguyễn Duy Nam )

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I. INTRODUCTION

1. About Vinamilk Company

Vietnam Dairy Products JSC (Vinamilk) is a Vietnam based company engaged inthe food processing industry, speciûcally, the dairy industry. It is involved in themanufacturing, marketing, wholesale trading and retail distribution of dairyproducts, such as milk of various forms and üavors, including üuid milk, powderedmilk and sweetened condensed milk, along with yogurt, frozen yogurt, ice cream,cheese and infant nutrition üour. Other products include soya milk, rice milk, bottledcoee, sugar, bottled juice and other non-alcoholic beverages. The Company alsoprovides packaging and logistics services, besides technical support to farmingand breeding Processes. [1]

Vinamilk was established on August 20, 1976 on the basis of three dairy factoriesfrom the old regime: Thong Nhat Dairy Factory (formerly known as Foremostfactory). Truong Tho Dairy Factory (formerly known as Cosuvina factory). DielacPowdered Milk Factory (formerly known as Nestlé factory (Swiss). [2]

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2.The Product9s STP (Segmenting- Targeting- Positioning)

Personalities Active,curious, creativity

Occasion: DailyUserstatus:potential/daily usersUsage rate: dailyBenefit sought: providenutritions that is goodfor their growth.

All over Vietnam

Young adult Age: 15-25Gender: male,femaleand others

Income: no income orlow incomeEducation:college/universitystudents

Lifestyle: doing a lot ofactivities to satisfy theirwants.

Personalities:energetic,enthusiastic,interested in novelty

Occasion : dailyUser status: ûrst-timeusers, regular users,potential usersUsage rate: regular,daily

Loyalty: mediumBenefit sought:good forbody growth, reûllenergy

All over Vietnam

Adult Age: 26-44Gender: Male, femaleand others.Marital status:Married, not married.Family size: singleperson or 3-4 people.Income: Middle-Highincome.

Occasion: Daily.User status: Regular.User rate: Heavy user.Loyalty: Medium.Benefit sought: Goodfor health, delicioustaste, convenient.

All over Vietnam.Density: Averageto High

The main segmentation that Vinamilk targets is children from 5 to 14 .Vinamilk desires toimprove physical health of children and aims to nurture young talents as children areconsidered the pillar of a nation9s tomorrow (Vinamilk 2016). The ûrst reason why Vinamilkchose this segmentation is because children roughly account for 23.2% of the population(Statista 2020). Secondly, the amount of middle-class population is increasing and they

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are starting to focus more on the value of the products rather than the price. This will leadto the result that Vinamilk could have more customers. (Euromonitor 2020) [4]

Vinamilk boasts a large market share with this segment. Indeed, the current shopopportunities lie signiûcantly in the middle class. This group of customers impliessigniûcant growth potential for the company. Because the young population is moreeducated, more receptive towards Western cultures, they are more inclined to consumedairy products. Smaller household pattern means that parents pay more attention to theirchildren. As children are the targeted segment of Vinamilk, this scenario implies moredemand from the market of the company. Traditional milk consumers are typically urbancitizens, who have more spending power and more concerns about healthy products. Theincreasing rate of urbanization indicates increasing dairy demands

1.2. Economic:

-The GDP in Vietnam reached around 261.92 billion USD in 2019 (trading economic 2019).Moreover, the GDP number increased roughly to 7% in 2019 and from 2002 to 2019, GDPper person in Vietnam rose 2.7 times, worth 2.700 USD in 2019( world bank 2020). Due tothe Covid-19 pandemic, the Organization for Economic Cooperation and Development(OECD) predicted that the world economy would decrease to 4.5% in 2020. However, theeconomy of Vietnam shows the opposite trend. In the ûrst 9 months of 2020, GDPcontinuously increased to 2.12% (GSO 2020) . Furthermore, there is a trend that more andmore Vietnamese people are paying attention to healthy and high-value products

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because of the dynamic economy and the rise in proportion of middle-income families(euromonitor 2020)

Overall, the success in controlling the pandemic, the increase in GDP and the demands forhigh-value products would develop the prỏt of Vinamilk

1.3. Natural:

Eect of temperature on dairy cows: temperature aects behavior, ability to collect anddigest feed, growth, reproduction and production of dairy cows. Temperature andhumidity aect feed availability and changing weather conditions are causative agents ofdairy cow disease. Temperature aects the fermentation of yogurt. Environmentalconditions also aect the storage of raw milk and dairy products.

However, there are places with temperate climates such as Sapa, Lao Cai, Da Lat....suitable for growing high quality grass. Although the climate is hot and humid, 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, Son La…

Thus, the company will easily obtain raw materials for production needs such as freshyogurt, sugar, etc. at a much lower cost than the production that has to import inputmaterials from foreign. Moreover, the ingredients are very diverse and always in a freshcondition without losing their original nutrients when they have to be preserved whenordering from other places. [5]

1.4. Technological:

Technology is one of the inputs to the production process, so it is an important factor indetermining whether the production of an enterprise is eective or not. Therefore, it alsoaects Vinamilk's marketing activities

Currently, the production technology equipment used by Vinamilk are of internationalstandards, using modern packaging technology, and importing technology fromfamous equipment suppliers such as: trota Pak (Sweden), APV(Denmark). The lines aresynchronous, new generation, modern, automatic control, or semi-automatic to meetthe requirements of food safety and quality. Using Advanced technology for herdrearing such as: Ethernet network, Bluetooth wireless connection technology, Wi-Fi andremote radio wave identiûcation technology with automatic identiûcation chip RFIDtags, the system Biosensors, surveillance cameras help increase the production ofdairy cows.

In addition, Wamas Warehouse Management System integrated ERP management systemand Tetra Plant Master Automation solution provides integrated operation of the plantfrom production planning, material input to the ûnished product output. [6]

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Unfortunately, the "Western brand oriented" trend among Vietnamese consumers, whichderived from an undeveloped economy, has also considerably aected domestic dairycompanies like Vinamilk . Meanwhile, the consumers also choose trusted and well-knownlocal brands . Otherwise, the ûgure for market share of milk in Vietnam has revealed apositive increase in the milk consumption, the milk consumption is expected to go up to 28liters per person in 2020.

In 2021, during the COVID-19, the demand for drinking milk still remains fairly stable andVinamilk still takes the lead of drinking milk products in 2020 with 40% value share. Thoseindicate that the habit of drinking milk amongst Vietnamese adults has been driven to amuch more positive side and they are likely to get used to consuming milk.

1.6. Political & Legal:

The milk consumption policy is stable and the regulation system is graduallyimproving.The Ministry of Finance proposes to the Government to reduce import tax ondairy products from 2-5% in order to contribute to reducing milk prices, creating conditionsfor all subjects to improve their health, improve Vietnamese stature, diversify sources ofraw materials, improve competitiveness.

But there are also some disadvantages like State agencies also lose control of marketprices. The enforcement process against unfair competition is not really eective and Milkinspection is still lax, only stopping at food safety inspection, but not controlling thecontent of substances that cause diculties for dairy businesses. [7]

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2. Microenvironment:

2.1 Overview :

Milk market has rapid economic growth, a wide market, and an open and appealinginvestment climate. The volume of the liquid milk market will reach VND 64.4 trillion inrevenue, equivalent to a growth rate of 10% in 2020. Retail output will reach 1.6 million tons,up 9% over the same period last year ( Babuki) [8]

According to the Vietnam Dairy Association, the dairy business in Vietnam would grow by9 to 10% every year in the future years, reaching 28 liters of milk per person per year by2020. Domestic fresh milk output is predicted to reach 1 billion liters, satisfying 38 percentof demand by 2020, and 1.4 billion liters, meeting 40 percent of demand by 2025,according to the Processing Industry Development Plan.

Dairy industry experts believe that the dairy business will continue to be a potential in thefuture because per capita milk consumption in Vietnam is still low. According to Mr. TranQuang Trung, Chairman of the Vietnam Dairy Association, Vietnam's dairy business hasexperienced consistent expansion over the years. The total value of these two segmentsalone accounts for nearly three-quarters of the market value with the output of fresh milkcurrently reaching 1,500 thousand liters, and powdered milk reaching 138,000 tons. [9]

2.2 Competitors : [10]

Criteria Dutch Lady Milk TH True Milk VinasoyBrand &

- Dutch Lady has beenoering Asian families withhigh-quality and nutritiousproducts since 1963- Dutch Lady is a brand ofFrieslandCampina.- Dutch Lady9s slogan:Nutrition from day to night#StrongerMeStrongerUs- logo: image of a girlcarrying fresh milk, the

- TH True Milk wasfounded in 2010.- TH true Milk-ALeading Brand inVietnam9s Fresh MilkMarket of TH Group- Slogan: Reallynatural

- Logo : 2 letters <TH=( standing for TrueHappiness and

- Vinasoy Brand SoyaMilk The Vietnam SoyaMilk Products Company -VinaSoy is the ûrst andonly enterprise inVietnam

- Slogan: Soya beans, justfor you.

- Logo: The green leafrepresents the power of anatural product; The

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main color is blue

- Products: variety ofproducts : fresh milk,pasteurized milk, yogurt,sweetened condensedmilk, full cream milk, juicymilk ( yomost and fristi),and ovaltine.

chairman is ThaiHuong)

- Products: Manyoptions: fresh milk,pasteurized milk, nutmilk, yogurt, ...

stylized letter Y inVinaSoy

-Products: Focus onSoybeans: Fami andVinasoy

- Milk brand from theNetherlands.

- The only dairy group inthe country to be awardedthe Royal title from QueenBeatrix.

- Milk source from Dutchcows (The world's mostvaluable dairy cow breed).

- The pioneer andonly brand currentlyin our country thatapplies the mostmodernpasteurizationtechnology ESLachieves internationalstandard certiûcationinto the productionprocess.- There are manystores that selldirectly.

- Soy milk, distinctivetaste, dierent fromtraditional milk.- Tetra Alwin Soytechnology keeps up to80% of the protein andisoüavones in soy.- Good for women.- Soybean source with themost diverse preciousgene bank in SoutheastAsia.

Marketingactivities (4Ps)

- Price: Good price- Product: Fresh milk- Place: Mainly sold at stallsin supermarkets andtraditional retailers,business agents.

- Promotion: the message"solid foundation, fear ofchallenges", advertisingmedia emphasizesscreening on prime timeslots, sale promotion (gifts,...) and public relation (donation for charityevents, the London 2012

- Price: Reasonable- Product: Fresh milk- Place: Sold atsupermarkets andtraditional salesagents, stores thatconnect directly withcustomers.- Promotion:communicationmessage "Pleasecherish MotherNature, who gave useverything",advertising on VTV,HTV, SCTV,...; publicrelations ( <School

- Price: Cheap- Product: soy milk- Place: Mainly sold atstalls in supermarkets,convenience store,grocery store andtraditional market.- Promotion:Advertisement; publicrelation; sale promotion.

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Strengths &weaknesses

- Strengths: Brand withhigh recognition, diverseproduct lines, guaranteednutrition in milk. Powderedmilk market share 20% ofthe market

- Weaknesses: Fresh milksupply is limited (takenfrom Dutch cows,packaging design does notmake a dierence, andpopular taste.

- Strengths: Largeinvestment, leadingequipment inVietnam, richexperience, cow farmhas a convenientlocation, so it providesenough milk, manystores sell directly-Weaknesses: Theforeign market has noplace

- Strengths: The ûrstenterprise in Vietnamproducing soy milk,technology importedfrom Sweden, high qualityproduct stability, uniquetaste.

- Weaknesses: Have notinvested much incustomer services (saleswebsite), monotonousproducts, limited ûnancialin marketing activities.

2.3. Customers:Consumer market

The customer market focuses on children ( 5-14 years old). At this age they are in a periodwhere they need a lot of nutrients to grow in height and weight, promote strong brains,teeth and bones, and provide energy. This is the age of rapid physical growth andchanges in the nervous system - endocrine . They are also very active, curious, creativeand depend a lot on their family. This age still depends a lot on parents and almost alldecisions are made by parents.

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2.4 . Intermediaries:Reseller

Resellers include supermarkets like Lotte mart, Co.op mart, Big C, Vinmart....andconvenience stores open 24/7 like Circle K, Shop and Go, GS25. Currently in Asia, thedeveloping world many customers still ûnd products in the traditional grocery stores. Inthe era of technology development, resellers also include e-commerce platforms such asshopee, lazada, .... These resellers make it possible for customers anywhere to buyproducts. Rural customers can buy at grocery stores or through e-commerce sites. It iseasy for urban customers to buy at convenience stores or supermarkets. Resellers play animportant role in bringing products to consumers.

2.5. Suppliers [11]

Suppliers Products oeredFonterra (SEA) Pte Ltd Milk powderHoogwegt International BV Milk powder

Perstima Binh Duong Tins

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Tetra Pak Indochina Carton packaging and packagingmachines

Dairy farms Pure cow9s milk

2.6. Public :General public:

Today, mothers prefer to choose non-GMO dairy products for their children becausegenetically modiûed milk has a lot of harmful eects on young children. Because of thatneed of mothers. In addition, mothers' demand for low-sugar/sugar-free products,nutritional supplements and especially organic milk is also gradually increasing. Manymothers do not even want to give their children canned milk for fear that they may causetheir children to have early puberty and many preservatives, they give priority to theirchildren using breast milk and eating enough nutrients. [12]

III, The company9s current marketing mix

3.1. PRODUCT :

Core product: Fresh Milk of Vinamilk provides nutrients and energy and contains most ofthe single nutrients that the human body needs. In Vinamilk milk, there are manyimportant ingredients that are protein (necessary for the conversion of necessarynutrients), fat (Good for the development of the brain, stabilizes the vascular system toensure the development of the body) , protein, carbohydrates, vitamins, minerals andwater. [13]

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