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Family Name Given Name(s) Student ID Subject Signature
Tran Anh Thang 15782988 Marketing Thang
Pham Van Luong 15781144 Marketing Luong
Lecturer: Dr. Navin Veerapa
Date: June 10, 2011
LA TROBE UNIVERSITY FACULTY OF LAW AND MANAGEMENT
GRADUATE SCHOOL OF MANAGEMENT
STATEMENT OF AUTHORSHIP
GROUP ASSIGNMENTS “I/We certify that the attached is material is my/our original work. No other person’s work has been used without due acknowledgement. Except where I/we have stated that I/we have used some of this material elsewhere, it has not been presented by me/us for examination in any other course of subject at this or any other institution. I/We understand that the work submitted may be reproduced and/or communicated for the purpose of detecting plagiarism”.
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TABLE OF CONTENTS
Executive Summary................................................................................................................................... 4
1. Introduction........................................................................................................................................... 5
1.1 About Vinamilk Corporation ..............................................................................................................5
1.2. The aim of the report and how it will be done ...................................................................................5
2. Mission Statement.................................................................................................................................6
3. Situation Analysis ................................................................................................................................. 7
3.1 Internal environment ........................................................................................................................... 7
3.1.1 Products............................................................................................................................................. 7
3.1.2 Financial and non-financial situation................................................................................................ 9
3.1.3 Channels.......................................................................................................................................... 11
3.2 External environment......................................................................................................................... 11
3.2.1 Markets overview............................................................................................................................ 12
3.2.2 Economic environment………………...….................................................................................... 13
3.2.3. Competitive environment……………………..…………………………………………………...13
3.2.4 Demographic environment............................................................................................................. 14
3.2.5 Social and cultural environment ................................................................................................... 14
3.2.6 Political and legal environment .................................................................................................... 14
3.2.7 Technological environment .......................................................................................................... 15
4. Marketing Objectives……………..................................................................................................... 15
5. Marketing Strategies ......................................................................................................................... 16
5.1 Target markets ................................................................................................................................ 16
5.2 Product strategies ............................................................................................................................ 17
5.3 Pricing strategies.............................................................................................................................. 19
5.4 Promotion strategies........................................................................................................................ 20
5.5 Distribution strategies ..................................................................................................................... 21
6. Conclusion……………………………............................................................................................. 22
REFERENCE LIST .............................................................................................................................. 23
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EXECUTIVE SUMMARY
The purpose of this report is to research about possibility to launch a new product development as
new tastes milk product in Vietnamese market. The first part of the report will describe about
Vinamilk Corporation (VNM). The product will be manufactured and marketed by VNM Corp, one
of well-know private enterprise in Vietnam who has 35 years of experience in consumer services
distribution with the very famous product like condensed milk, liquid milk, powder milk and
yoghurt. The new product will have brand name as “Weight loss dairy milk, Zorok Beer and Moment
Coffee”. The second part is about mission statement and management philosophy of VNM Corp. The
third part is about situational analysis of company. This part will discuss about internal and external
factors such as market overview, competitive environment, economic, demographic, social and
cultural, political and legal, technological environment. The third part is about critical issues the
company will face when launching the new product. The fourth part is about marketing objectives
including market share, estimated market revenue, other environmental and societal issues. The fifth
part is about marketing strategies. A comprehensive plan about 4 P’s marketing strategies including
product, pricing, promotion and placement.
The last part is about the conclusion, some recommendations for successful implementation of new
product development based on current economic and social factors.
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1. INTRODUCTION
Name Vinamilk Corporation
Head office 184 – 186 Nguyen Dinh Chieu, District 3, HCM City
Tel 84 – 83930.03.58
Fax 84 -8 – 3930.52.06
Website: www.vinamilk.com.vn
1.1. Company’s information and markets.
VNM was established in 1976 and since then has developed into the biggest dairy manufacturer in
Vietnam. VNM now has 09 factories with designed capacity of 504 thousand tons per year, a
diversified dairy products range and owns 37% market share in dairy market.
VND has a well-diversified products range with 4 main categories: condensed milk, liquid milk,
powder milk and yoghurt, other products like ice – cream of coffee just contribute o modest portion
to total sales (5% in total). VND is currently dominant in the liquid and yoghurt market segment,
especially, as for yoghurt, VNM accounts for 95% of market share already.
Over years of development activities and nearly 30 years, VNM has become a leading enterprise of
the milk processing industry in Vietnam. The listing has received the title is:
- The title of Labour Hero.
- Labor Medal First Class, second, third.
- Continuous headed "Top Ten Vietnam high quality goods" from 1995 – 2004.
- Award for innovative science and technology organization of the World Intellectual Property
(WIPO - World Intellectual Property Organization) in 2000 and 2004.
- September 2005: third-class Independence Medal by President Tran Duc Luong has been awarded
for outstanding achievements in business five years from 2000 to 2004
1.2. The aim of this report and how it will be done
In recent years, the economy is increasingly dynamic and the integration with world markets, the
occurrence of competition between domestic and foreign enterprises more and more develop.
Competition of domestic enterprises are foreign companies, corporations have decades of experience
with market economies, abundant capital, orchestra personnel equipped with adequate knowledge,
skills necessary. To be able to compete, Vietnam enterprises should also be equipped with knowledge
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and skills consistent with the requirements of the increasing business, and marketing is one of the
most important skills.
From producing the best products, the cheapest possible. Businesses have made customer confidence
in their products rather than buying rivals. And to do that companies need to understand customer
needs better, they need better communications about their products and they need to build a long-
term relationship between brands and customers. This report will shortly analyze the marketing
strategy of Vinamilk milk factory in order to compete with their rivals.
2. MISSION STATEMENT
2.1 Slogan: Never stop growing.
2.2 Mission
For fresh cow material:
- To expand the scope of the fresh cow material to replace imported raw materials.
- Ensure sanitary materials, from livestock, dairy operators, maintenance, and transportation to
production.
- Make sure the output of fresh milk products for dairy farmers, contributing to increased dairy herds
in Ho Chi Minh and the country as "dairy development orientation to 2010" by the Ministry of
Agriculture specifically, Vinamilk plans to continue promoting support farmers to develop the
materials and improve the proportion of milk of domestic raw materials by about 50% of the total
milk supply of raw materials put into production within 3 years - 5 years.
- Policies to support farmers in dairy farming with the above objectives, the Company will continue
to assist dairy farmers to the following policies.
- Support farmers loans to buy seeds for the development of dairy farming, animal husbandry and
technical assistance to help farmers improve seed quality, quality stables, pastures ... and a
commitment to underwriting the entire production Fresh dairy cow farmers.
- Investment in developing a model dairy farm model with modern techniques, do the study visits to
farms and households, dairy farming, capital support and cooperation with local to create areas in
dairy technology.
- Facing the animal feed price is more volatile; the company increased the buying price from 3,500
VND / kg to 4,200 VND / kg. The company also encourages dairy farmers directly and delivery of
good quality by adding 50 bonuses per kg of milk delivered in 04 weeks. Thanks to well-organized
procurement process, the output of fresh milk in the country each year an increase of Vinamilk. In
2000, the company purchased just over 50,848,619 pounds, in 2001: 63,186,000 kg in 2002: 73.2
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million pounds, in 2003: 85,663,683. In 2004, the Company purchased 89 million liters of pure fresh
cow's milk in the country, up 4.1% compared to 2003. In the nine months of 2005, the company has
purchased 70 million liters of milk, up 10% over the same period in 2004. Ensure quality fresh cow
material, so far, the listing has built more than 70 hubs raw milk, with milk purchasing over 260 tons
per day, accounting for more than 80% of fresh milk in the country. The company has invested in
quality control system of fresh milk and built a team of Product Quality Inspection (KCS) in charge
of quality control right from raw material input. The company also organizes training for staff is on
the food safety (HACCP training), help information timely advice to farmers on milk quality.
3. SITUATION ANALYSIS
3.1. Internal Environment
3.1.1 Product:
The main product groups
- Condensed milk, milk blisters
- Fresh milk, yoghurt drinks, su su
- Milk powder, nutrition powder
- Cold storage (ice cream, yogurt, cheese, flan)
- Soft drink (soy, fruit juice, tea, purified water)
- Food (biscuits, chocolate)
a) The condensed milk:
This is the group's traditional products with brands such as Vinamilk: Mr. Tho, Southern Star,
chocolate milk, condensed milk coffee Moka. Condensed milk is divided into two forms:
concentrated milk and milk 50g blister to facilitate the consumers.
b) The raw milk - Yogurt Drink:
Vinamilk sterilization of fresh milk is made from pure fresh cow's milk, is treated by UHT and
sterilization methods do not use preservatives.
Brand: Vinamilk pasteurized milk, Milk, Smart, Flex Yogurt drink Yomilk Pasteurized yogurt drink
made from pure fresh cow's milk, are calcium, vitamin C, or soluble fiber extracted from plants to
support the digestive system work better.
Brand: Yomilk, Yao, Susu yogurt ice cream
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c) The milk powder - powder nutrition:
Milk powder includes product lines of milk powder for children, infant formula for mothers during
pregnancy and lactation, calcium powder, milk powder and special nutrition for the elderly.
Brands: Dielac Mama, 1,2,3 Dielac, Dielac Calcium Premier 2400, DielacSURE, Dielac Star ...
Nutritional Powder including powdered nutritional products Ridielac tradition, Ri-Advance and
senior meal feeding additional nutrients.
d) The frozen (yogurt, fromage, flan, ice cream) Yogurt
Vinamilk yogurt is made from yeast and bacteria to live, good for the intestines to help support the
digestive system. Vinamilk yogurt is divided into groups of traditional yogurt products, yogurt,
calcium, fiber and low in fat, sugar and yogurt kefir with kefir yeast.
Brand: Vinamilk yogurt, Vinamilk Plus, kefir Flan
Flan cake made from milk, eggs, sugar and processed in line with modern techniques.
Cream
Vinamilk cream milk include cream in packages of 1 liter or 450ml box family, ice cream and ice
cream cups branded Dinno trees for children.
Brand: Familia, Dinno. Fromage
Cheese Beef Stick it on the line made by France, with two categories: box 140 grams of cheese and
cheese strips.
e) The drinks:
Soymilk
Soymilk is extracted from soybeans should not be selective cholesterol, are packed in packing boxes,
paper bags and plastic bottles.
Brand: Soya Milk, Soybe
Juice
Fresh juice of Vinamilk has high vitamin content with flavors such as orange, peach, apple, guava,
custard apple, Grape, Grapefruit, Pineapple, Orange, Strawberry, Carrot ...
f) The food
Vinamilk nutritional biscuits are manufactured according to international standards on nutrition,
studied, developed under the supervision of the Development Research Center Vinamilk Products
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g) Coffee:
Including coffee roasters and soluble coffee.
Brand: Moment, True Coffee, Kolac.
3.1.2 Financial situation
VNM has quite rich cash base VND, after selling the stakes to Sab Miller, it has some more money
for investment. It is hoped that VNM would take wise use of large amount of money for to finance
for its CAPEX disbursement I the future. In VNM’s plan total amount set out for investment this year
will be VND 1,208bil, the disbursement timeline will be depend on the actual implementation of the
projects. This is an equity-based enterprise with healthy cash flow, the debt/total asset is 0.19 and we
expect this maintain at averagely 0.26 in the next five years. So, VNM will have little burden over
the interest expense.
Financial investment Ending Q2.2010, VNM has in hand around a stock investment totaling VND
700b and a provision of 217b. Though it exposed itself to the fluctuations of the finance market, it
also has chance to reverse the provision when the market situation clear up in the years to come this
year. VNM has some investment in other subsidiaries and JVs related to the food sector like the Asia
International food and some investments side-tracked like Bao Viet Bank; however, we just can
access little information about this investment.
BALANCE SHEET
ITEMS 2009A 2010A 2011A 2012E 2013E
ASSETS 6,569,768 6,175,438 7,055,510 7,125,779 7,401,347
Current asset 4,068,824 3,430,226 3,931,546 4,052,296 4,814,318
Non-current asset 2,500,944 2,745,212 3,123,964 3,073,483 2,587,029
LIABILITIES & EQUITY 6,569,768 6,175,438 7,055,510 7,125,779 7,401,347
Liabilities 1,169,001 1,369,829 1,930,759 1,873,829 1,842,250
Current liabilities 830,455 895,234 1,197,259 1,224,553 1,260,527
Non-current liabilities 338,547 474,595 733,500 649,276 581,722
Owner equity 5,400,767 4,805,609 5,124,751 5,251,950 5,559,098
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Equity 5,400,767 4,640,544 4,762,708 4,680,208 4,764,470
Welfare funds 0 165,065 362,043 571,742 794,628
INCOME STATEMENT
ITEMS 2009E 2010E 2011E 2012E 2013E
Sales (VND mil) 9,927,657 10,717,736 14,989,402 16,121,242 17,230,929
COGS (6,651,530) (7,395,238) (10,342,687) (11,123,657) (11,889,341)
Gross profit 3,176,850 3,215,321 4,496,821 4,836,373 5,169,279
Financial revenues 249,184 93,542 95,942 99,992 105,992
Financial expense (30,680) (50,771) (82,664) (69,585) (58,757)
In which interest expense (19,175) (31,732) (51,665) (43,490) (36,723)
Selling and admin expense (1,389,872) (1,500,483) (2,098,516) (2,256,974) (2,412,330)
Operating profit 1,986,307 1,725,877 2,359,917 2,566,316 2,767,460
Total before tax profit 2,129,498 1,883,387 2,533,177 2,756,902 2,977,105
Total after tax profit 1,895,253 1,676,214 2,026,542 2,205,522 2,381,684
CASH FLOW STATEMENTCASH FLOW STATEMENT
ITEMS 2009E 2010E 2011E 2012E 2013E
Net income 1,895,253 1,676,214 2,026,542 2,205,522 2,381,684
Depreciation 318,982 387,971 470,999 514,236 514,236
CFO 1,855,099 2,218,183 2,054,095 2,506,535 2,691,956
Interest(1-t) 17,066 28,241 41,332 34,792 29,379
CAPEX 480,512 705,500 823,083 428,633 0
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Net borrowings 30,913 153,939 253,129 (112,787) (90,229)
FCFF 1,391,652 1,540,924 1,272,344 2,112,694 2,721,334
FCFE 1,422,565 1,513,609 1,216,640 1,424,448 1,673,609
3.1.3 Channels.
Having an extensive network is one of the most important competitive edges that set the company
apart more from its peers.
To date, VNM has 125,000 outlets nationwide while Dutchlady and Nutifood just have in hand
80,000 outlets and 60,000 outlets correspondingly. Besides the aforementioned traditional ways of
distribution, VNM would also invest in developing the modern distribution channel through
wholesale super market and other supermarkets, which now just contribute to 20% of total sales.
3.2. External Environment
SWOT analysis
Strengths Weaknesses
- Executive board and the company are capable of
good management and high professional level
- Vinamilk brand is a familiar brand name. With
product quality and consumers are always
appreciated, Vinamilk is gradually self-asserted
themselves not only in the domestic market but also
international market.
- The majority of product are manufactured in 10
plants evenly around the country, with a total
capacity about 570.406 tons of milk per annum. So,
with over 240 distributors with over 140,000 points
of sale have created favorable conditions for
companies to be their products to consumers with the
fastest time.
- Inputs of the dairy industry including milk and milk
powder, milk powder, while almost totally imported
fresh milk can meet only about 28% of the production
needs of the dairy processing plant. Thus, exchange
rate fluctuations will affect directly to business results
of enterprises.
- Competing with rivals in the industry also is moving
more aggressively, also partly affected the business
results of enterprises.
- Currently the state holds 47.6%, foreign owns 46%
stake in Vinamilk, only 6.4% in the hands of board
members, employees and outside investors. This
number is also 6.4% less transactions, should the
current liquidity is quite low
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Opportunities Threats
- Vietnam economy in recent years has maintained a
high growth and stability. This is the opportunities to
develop more strongly for the dairy industry in the
future.
- Vietnam has joined the regional economic
organizations and the world will open up many
opportunities for growth to the company.
- Oriented development of milk processing industry
in 2015, the country strives for 1.9 billion liters of
fresh milk, the estimated average 21 liters per person
per year, 35% meet the needs of consumers. To 2025
is 3.4 billion liters of milk, an average 34 liters per
person per year. Thus the potential for revenue
growth and profitability of the company in the long
term is still large.
- Because raw materials are mainly imported from
foreign companies should also influence the
fluctuation of material prices. Exchange rate
fluctuations in recent times have also caused the
Company not less affected.
- Competition in the powdered milk market segments
is going extremely tough. Although foreign milk
prices continued to increase 5-7% from early 2010,
but consumers still prefer foreign milk than milk
content, so the ability to increase revenues from the
company's array formula is not as high as domestic
products other. Marketing of the company's activities
mainly in the south, while the North, accounting for
two thirds of the national population has not been the
company invested heavily in marketing activities, this
can lead to public Vinamilk losing market into the
hands of its competitors such as Dutch Lady, Abbot.
3.2.1 Market
Milk is one of the industry achieved the fastest growth in the food industry in Vietnam, with revenue
growth averages 18% a year. Dairy Vietnam has potential for milk production. According to statistics
from the Association Vietnam animal feed, raw milk demand increases from 500 million liters (2010)
to 805 million liters (2015). Rising demand for milk in the developed market, milk powder increased
significantly, especially in South Asia. Consumption in Vietnam is about 14 liters per person per
year. There are many corporations, companies, manufacturers purchase raw milk, making the
demand greater than supply. So many companies focus on developing material zones to create world
to stand firm in the development process.
Recent years, Vietnam Dairy development is quite fast, if as before the 1990 only 1-2 manufacturers,
the current distribution formula milk market increased to 72 Vietnam Dairy business, focused
primarily in the southeast and the Red River Delta. Besides the entry of foreign brands of milk, such
as Abbbott, Babysan, Dumex, Dutch Lady (Frieslandcampina), Meiji, Nestlé, ... The competition
between producers and milk processing in the country with imported brands of milk to make dairy
sector in Vietnam facing great challenges and also opportunities to develop and market domination.
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According to the general department of customs and import of milk powder annually at 300-400
million. This shows that, the opportunity to develop and expand the domestic milk market is still
large.
3.2.2 Economic environment.
Consumer Price Index (CPI)
The consumer price index (CPI) in 02/2010 saw an increase of 1.96% as against the previous month.
February, CPI rose by 8.46% as compared to the same period last year, and by 3.35% as against
12/2009. Average CPI for the two months rose by 8.04% against that in the same period in 2009.
February, gold price decreased by 2.03% as against the previous month, by 4.91% against 12/2009
and rose by 42.58% as compared to the same period in 2009. February,USD price increased by
0.33%, 0.22% and 8.34% as against the previous month, last December and the same period in 2009
respectively.
Total retailed sales of consumer goods and services
The total retailed sales of consumer goods and services in the two months at current prices were at an
estimate of VND 246.3 trillion, rose by 27.4% as compared with the same period last year (the
growth was 17.9% if the factor of high price was excluded). Of which, the individual economic
sector gained VND 129 trillion, increasing by 24.9%; the private sector: VND 81.9 trillion, up by
37.6%; the state sector: VND 25.9 trillion, up by 12.8%; the FDI sector: VND 6.8 trillion, growing
by 20.1%, and the collective sector: VND 2.8 trillion, up by 37.6%. Considering by business branch,
the trade gained VND 194.5 trillion, rose by 28%; the hotel and restaurant: VND 27.1 trillion, going
up by 23.4%; the service: VND 22.2 trillion, increasing by 26%, and  the tourist: 2.6 trillion, up
by 35.1%.
(http://vietnambusiness.asia/vietnams-economic-situation-in-the-two-beginning-months-of-2010/)
3.2.3 Competitive environment.
Current source of raw milk in the country meets only a fraction of the demand for production of
condensed milk, fresh milk and yogurt, and raw materials for production of milk powder imported
100%. Milk powder products by domestic enterprises are producing milk from imported materials.
The investigation of the Vietnam Dairy Products Company, the Company currently accounts for
about 39% domestic market for milk. Currently JSC TH milk with support from North Asia
Commercial Joint Stock Bank, has initiated construction of milk processing plants with capacity of
500 million liters of milk per year, worth 148 million dollars. TH Milk will start to go into
production in 2011 will be a major competitor of CAN-2012.
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Graph: Market share of a large number of firms in the market milk powder in water
3.2.4 Demographic environment
Research and Markets
() has announced the addition of the "Vietnam in 2030: The Future Demographic" report to their
offering.
In 2030, the population of Vietnam will be touching 100 million. Population growth will be driven
by huge increases in the population aged 54 and over. Since the baby boom of the late 1970s and
1980s, birth and fertility rates have fallen dramatically to below the replacement rate. ThConsumer
demand increases.
3.2.5 Social and culture environment
Vietnam consumers, especially young people who have preferred the popular dairy products
produced in Vietnam. The popular dairy products in the country can compete with imported products
in quality and price. Therefore the local market is a good environment for the VietNam’s dairy
producers
3.2.6 Legal environment
Mr. Phan Chi Dung, Director of the Department of Light Industry (Ministry of Trade and Industry)
said, in 2008 and 2009 has many great changes for the world economy and domestic. Is accompanied
by higher milk prices. The producers increase milk price due to the cost of raw materials, fuel input
increased as sugar prices, electricity prices and exchange rates is inflation ... Meanwhile, the price
management, market management agencies of the State lax. Process of competition law for acts of
unfair competition, the act of restricting competition in the dairy market is not effective. Without the
close coordination between customs, tax and market management agencies in inspecting, testing and
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control of milk prices. Therefore, in the international economic integration is necessary to restructure
the production, dissolution, sale or merger of inefficient enterprises to create larger businesses, have
more potential. In particular, many comments state that a proposal directly to the Ministry of Trade
and Industry is sustainable development strategy for the dairy industry. That is parallel to the
improvement of the policy and relevant legislation to ensure the interests of consumers and fair
competition environment, prevent monopoly prices for milk as last time.
3.2.7 Technological environment.
In recent years, has not stopped Vinamilk technological innovation, investment in machinery and
modern equipment, advanced management and product quality to meet the increasing demands of
consumers. Dairy technology, dairy product and nutritional meal is modern technology to ensure
product quality and food safety. Vinamilk now owns modern production lines in Vietnam. The whole
machinery and equipment of the Company are based on advanced technologies of the countries in the
world. The main production line includes:
- Sweetened condensed milk production line: capacity of 260 million boxes per year. The company is
planning to upgrade its capacity to more than 290 million boxes per year.
- UHT milk lines - Yomilk - fruit juice - Soy milk: capacity 237 million liters per year. The company
is planning to invest some more filler to improve the ability to exploit.
- Yogurt chain: capacity of 56 million liters per year. The company is planning to pgrade production
lines at its plant in Can Tho, Saigon, Nghe An
- Powder line - nutritional powder: about 18 thousand tons capacity per year
3.3. Critical Issues
4. MARKETING OBJECTIVES
4.1. Financial objectives
With the growth of the company, demand of milk consumption in the domestic market at the same
stage of development and strategy to penetrate international markets, the company is planning a
number of new investment production line, factory building. At the same time to expand business
operations, the company also invested in some new areas. Investment and development plans as
follows:
- Develop more dairy factories in some potential local markets and raw material cow's milk.
- Intensive investment, innovation and renew equipment for the existing units.
- Develop a new product such as beer, coffee...
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- Joint venture of new buildings for diversification of business lines.
4.2. Marketing objectives
Recently, there are some concerns raised regarding the movement of the Head of marketing teams of
VNM; in the medium terms, this won’t be affected Vinamilk much but in the longer term, the
company needs to find a suitable replacement to continue leading the marketing activity.
Importantly, a reputed brand name can weather VNM through some kinds of food scandals related to
quality matters. In the Q3.2010, the melamine scandal hit heavily some dairy producers like Hanoi
milk with sales sliding 67% QOQ and around 50% of the existing consumers boycotted its products;
however VNM due to good brand name and good quality withheld well against the turbulence with
QoQ sales growth of 6% and it even won some market share after the hardy period. VNM is highly
appreciated for some appealing TV commercials. VNM’s expense on the selling part is also stable,
with the portion of 13-14% of total sales and the selling expense to some extent follow in pace with
sales growth. In the rising completion context, VNM would still keeps the same selling portion
despite the tight cost management scheme that is being applied now.
5. MARKETING STRATEGIES
5.1. Target Market
· Target market
One of the top ten dairy companies in Vietnam with strongest brands and operate for over 10 years in
the subsidy mechanism, as well as many other companies only produce according to plan, but as
entered the market economy, Vinamilk quickly seize the opportunity, do not stop technological
innovation, investment infrastructure investment, diversification of products to prepare for a new
journey.
Vinamilk is a trademark of Vietnam, was built by the hands and minds of Vietnam so they can afford
to healthy competition with the business community WTO, thus, target market of Vinamilk not only
domestic market but also the foreign market.
· Segmentation of customers:
ü White collar (office staffs, businessman/woman): age of them is from 25 to 55
ü Foreigners include businessmen/women and tourists
ü Blue collar (industry worker performs manual labor) and farmers
ü For mothers, babies and elders
ü Others
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5.2. Products
Differentiation strategy: based on innovation competency, company can introduce advanced features
like design, package, trademark, product quality and so on. To meet the increasing demands of
consumers, the listing has constantly renewing technology, improving management and product
quality. Currently, Vinamilk has over 200 kinds of products with the high quality, are expertised by
international organizations. So, their products are very easy to get the attention of customers. The
company will cut cost to compete on price with other products. Moreover, Vinamilk also produce
some more new products with the very hight efficiency such as: newly tastes beer, “moment” coffee
and weight loss dairy milk… The company focuses provide after-sale service to create satisfaction
for consumers. According to Japanese firms, implications for manager to learn from product
development strategies are time-based competition, three levels of innovation and reduced cycle
times (Jacobs and Herbig, 1998). Business design of product, brand managmenet and market
orientation are other important factors in product strategies (Cravens, Piercy and Prentice, 2000).
· Weight loss dairy
Currently obese children in Vietnam is increasing in combination with research in conjunction with
the weight loss market milk, Vinamilk see fewer competitors to participate in this market, which has
created momentum for the launch Vinamilk the new product - "Vinamilk milk weight loss" and
immediately received the support of consumers.
With research objectives and provide effective solutions to weight loss, safety, consistent with the
physical condition of Vietnamese people, this product is a breakthrough that could help bring real
benefits to consumers.
· Newly tastes beer
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Currently, beer is a drink very popular in Vietnam, is evidenced by the production of beer production
and consumption is increasing in the last few years. Recognizing this trend, Vinamilk immediately
jump into this exciting market with a joint venture with SAB Miller (brewing company the world's
second largest beer production) to produce beers with a total investment Zorok 27 million. In early
2010, beer Zorok be brought to market quickly and attract the attention of customers.
· Moment Coffee
Economy increasingly integrated, work well under pressure then increases. This requires everyone to
be alert on the job and the solution of choice at most coffee. So hot coffee market has visibly. Soon
after, in 2010 Vinamilk has been on the coffee market with coffee moment brandname. However, due
to new market participants, being competitive should not resonate Vinamilk large. Unyielding, along
with expenditures for marketing advantage is very high (over $ 2 million) Vinamilk has launched a
series of strategies to dominate the market.
In summary, Vinamilk has been very successful in its product strategy. These strategies are based on
actual needs, thus it have the effective immediately. Moreover, a huge investment costs for
advertising, introducing fresh new products to create favorable conditions for the provision of
information to their consumers. Quality of their product also created trust with customers. Vinamilk
packaging is simple but full and beautiful should also cause the attention of numerous consumers.
5.3. Pricing strategies
Price is considered an important competitive factor in attracting customers of all businesses. Thus,
price strategy is in accordance with the meaning of special importance, helping Vinamilk to have an
effective business strategy in order to compete with other peers.
Vinamlik main goal now is to maximize shareholder value and pursuing strategic business
development. At that price will be calculated to increase sales and maximize profit.
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To achieve the goal of becoming the dairy and food companies have a healthy growth rate and most
stable firm in Vietnam with long-term competitive advantage production line, Vinamlik accept lower
price as possible to reach the largest market size.
To archive those goals, Vinamilk use lots of price strategy as following:
· Price stability
Despite the race to gain the profits of foreign firms, Vinamilk maintain price stability since
mid-2008 to present. Vinamilk current price on the market of only about 1/3 compared to the
cost of foreign milk.
With current milk prices, Vinamilk accept lower interest margin or compensate for the
business from many different product lines to share the burden of consumer spending, not
losses.
· Higher price but higher quality
When the current product value is positioned in the minds of consumers is high, the
positioning of new products entirely favorable. A series of Vinamilk trademark upgrades
such as Dielac to Alpha Dielac with colostrum colostrum of Vinamilk, Friso to Friso Gold
up, the Dumex to Dumex Gold.
· Stable price but higher quality
The products have low value to locate in the customer mind, Vinamilk will try to locate at
higher value, but keep the original price. Typically, positioning the pasteurized milk and
yogurt.
· Purchasing price strategy
Guidelines: The variety of motives, not urbanization, good breeding conditions, but the
shipping cost is lower. At the same time, always adjust purchase price for seasonal milk
prices and the world situation.
Conclusion: The price policy of Vinamilk is quite reasonable. Competitive advantage compared to
the isolated product is the absolute advantage in meeting the majority of consumer demand in
everywhere, all boundaries and all classes.
5.4. Promotion strategies
· Advertisement
Understand the importance of advertising in its promotion strategy, Vinamilk always focused, highly
creative and constantly has achieved no small success in improving their sales. Marketing campaign
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with communications media to help consumers understand the benefits of "fresh, pure come directly
from nature"
Investment in building the trust of consumers is a long process, requiring huge investments and long-
term marketing. The increase in brand value for Vinamilk as well as increased sales, market share
and profits on short and long term was affirmed, the results are outstanding charges were dropped.
The advertising media: with the introduction of its products to the majority of consumers, Vinamilk
use all forms of advertising such as television, radio, newspapers, outdoor advertising...
· Community activities
Continuation of traditional activities for community benefit, Vinamilk has been active in the fields of
social and humanities community. With strategies to reach customers more often and friendly,
Vinamilk is and will be more community oriented programs in the future.
- Advertise with the message "100% pure fresh milk,” (hundred percent, hundred percent, hundred
percent of pure fresh milk) to attract and retain customer confidence after a series of articles about
the milk products that formula rate is very high. Vinamilk the first to exploit this in their advertising.
This is a feeding strategy according to public opinion, said fire engines during the time consumers
are disappointed with the producers tricked for so long. The message "hundred percent" will be
repeated engraved on the customer's mind whether the customer has accidentally or intentionally
listening. From this ad, perhaps hoping that clients Vinamilk of other brands will turn pro Vinamilk
with 100% pure fresh milk.
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5.5. Distribution strategies
Vinamilk's distribution network is a competitive advantage than other competitors in the market of
Vietnam. The company owns an extensive distribution network across the country, which is
favorable to bring products to bulk consumers.
The company has incentives strategy for their agents to become close friends, faithful to their
products. Where they breach of contract, the company determined to cut out an example for other
agents.
Agent system classified into two types:
- The group of dairy products (milk, milk powder ...): This group posed Vinamilk essential to keep
the commitment not to sell any other dairy products.
- Group of cream, milk, sour milk: the open and widely, advocated unrestricted harsh conditions.
Currently the company has two distribution channels:
- Distribution through traditional channels: (the ferries 220 independent distributors in 64
provinces and more than 140,000 retail outlets across the country) shall distribute more than 80%
of the company. Vinamilk has opened 14 showrooms of products in major cities.
- Modern distribution channel (supermarkets, Metro ...) Vinamilk have an advantage through the
dairy factories located in many places spread throughout the country. With a distribution network
all over the country as well as other direct channels such as hospitals, supermarkets, schools ...
Vinamilk likely to turn the disadvantages from the outside supplier to the customer.
Vinamilk that also managed through pricing policies, promotion of the distribution system. While it
is important that the object-end customers also benefit from increased service quality improvement.
6. Conclusion
Based on market research, the outcome of the marketing plan is potential. The company can sell new
product domestically and internationally to Asia areas. Vinamilk has great finance and management
capabilities. The disadvantage is high product imitation rate. The company should avoid regional or
global economic crisis as in the past years.
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