ESSAY MARKETING PRINCIPLE ANALYZE TH TRUE MILK MARKETING STRATEGY IN VIETNAM MARKET AND PROPOSE

UNIVERSITY OF FINANCIAL – MARKETINGMARKETING MAJOR --- ---ESSAY MARKETING PRINCIPLE ANALYZE TH TRUE MILK MARKETING STRATEGY IN VIETNAM MARKET AND PROPOSE Teacher: Diệp Long PhúMembe

UNIVERSITY OF FINANCIAL – MARKETING

MARKETING MAJOR

-

-ESSAY MARKETING PRINCIPLE

ANALYZE TH TRUE MILK MARKETING STRATEGY IN

VIETNAM MARKET AND PROPOSE

Teacher: Diệp Long PhúMember: Nguyễn Đông Bảo Châu Trần Xuân Thống

Cao Mỹ Nhi Nguyễn Văn LắmClass: CLC_20DMA03

TABLE OF CONTEN

PART 1: THE THEORETICAL BASIS OF “TH TRUE MILK MARKETING

STRATEGY IN THE VIETNAMESE MARKET” FROM 2010 TO 2020 2

I The marketing environment 2

II The STP strategy 5

III Marketing mix (4P) 5

4 Promotion: 6

IV Recommendation 7

PART 2: STATUS OF THE MARKETING STRATEGY OF TH TRUE MILK BRAND IN VIETNAM MARKET 2010-2020 8

I INTRODUCTION 8

TH True Milk Company 8

Mision and vision statement: 9

Production Process: 10

Business activities: 10

The founder: 11

Products: 12

II MARKETING ENVIRORNMENT: 13

MICRO MARKEITNG ENVIRONMENT: 13

a) Climate: 13

b) Customer: 13

c) Collaborator: 13

d) Competitor: 17

e) Company: 19

MARCO MARKETING ENVIRONMENT: 21

a) Political: 21

b) Economic: 22

c) Sociocultural (social): 22

d) Technological: 22

III STP MARKETING: 23

a) Demographic: 23

b) Psychographic: 23

c) Behavioral: 24

TARGETING: 24

POSITIONING: 25

IV MARKETING MIX (4P): 26

The "real" story hits the consumer's mind 26

PRODUCTS: 27

a) Core benefits: 27

b) Basic product: 27

c) Expected product: 28

d) Potential products: 29

PRICE: 29

a) Pricing: 29

b) Pricing strategy: 30

PLACE: 30

PROMOTION: 32

a) Message: 32

b) Measurement: Preemptive Claim (The Laws of Mind): 32

c) PR: 33

d) Sale promotion: 34

V RECOMMENDATION: 35

VI REFERENCE 36

VII CÔNG VIỆC VÀ ĐÓNG GÓP CỦA TỪNG THÀNH VIÊN TRONG NHÓM 38

PART 1: THE THEORETICAL BASIS OF “TH TRUE MILK

MARKETING STRATEGY IN THE VIETNAMESE

MARKET” FROM 2010 TO 2020

I The marketing environment

1 Macro Marketing Environment

The macro-environment includes the broad features that affect the marketand marketing activities as well as the factors of the microenvironment

 Affecting directly or indirectly the business operations of the enterprise aswell as the customers purchasing behaviors

 Affecting big businesses

a) Environmental:

- Consist of: climate, terrain, natural resources and other factors

- Natural factors affect businesses’ marketing activities

- Prioritized the human habitat problems

b) Sociocultural (social):

- Consist of: traditions, culture, customs, practices, religion, etc These factors

have big impact on the customers buying behaviours

- Businesses need to find solutions in order to adapt to these national identities c) Population:

- Population size, population structure (age, sex, population growth rate and

d) Economic:

- Economic growth, inflation, unenployment, interest rate, etc.

- Economic organizations influence on the market

- Provision problems and demarketing

e) Technological:

- Technology science develops consistently, it affects the marketing mix (4P)

- Businesses should always observe and renew technology so that efficiency

and maximum quality can be achieved to compete with other businesses inthe market

f) Political:

- Political stability, political structure, adminstration, laga; regulation

2 Micro Marketing Environment

- The micro marketing environment are the factors that affect directly the

company and its ability to meet customer needs

- These factors are divided into 2 groups: external and internal

 Departments have different goals to pursue, that’s why eachdepartment's goal is never the same as the others

 In order to reach a consensus with a high rate, the marketingdepartment needs to make marketing decisions on condition that thayare subjected to the company’s substraints such as motto, goals,strategies, etc

- Divide larger market into groups of people with similar demands and

respond similarly to marketing stimuli

- Seek within-group sameness (homogeneity) and between-group difference

2 T: Targeting

- The process of selecting the segment to serve

- The firm’s goals and strengths must fit with the needs of the segment

3 P: Positioning

Create clear, distinctive, and desirable place relative to competing products

in mind of target customer

III Marketing mix (4P)

1 Product:

- Core benefits: The fundamental need or want that consumers satisfy by

consuming the product or service

- Basic product: A version of the product containing only those attributes or

characteristics absolutely necessary for it to function

- Expected product: The set of attributes or characteristics that buyers

normally expect and agree to when they purchase a product

- Augmented product: The inclusion of additional features, benefits,

attributes or related services that serve to differentiate the product from itscompetitors

- Potential product: This includes all the augmentations and transformations

a product might undergo in the future To ensure future customer loyalty, abusiness must aim to surprise and delight customers in the future by continuing

to augment products

2 Price:

- Pricing: As the term is used in economics and finance, this is the act ofestablishing a value for a product or service In other words, pricing occurs

- Pricing strategy: A pricing strategy takes into account segments, ability to

pay, market conditions, competitor actions, trade margins and input costs,amongst others It is targeted at the defined customers and againstcompetitors

3 Place:

The process of moving products from the producer to the intended user iscalled place In other words, it is how your product is bought and where it isbought This movement could be through a combination of intermediariessuch as distributors, wholesalers and retailers

PART 2: STATUS OF THE MARKETING STRATEGY OF

TH TRUE MILK BRAND IN VIETNAM MARKET

2010-2020

TH True Milk Company

- Although TH True Milk’s dairy products have just been lauched onDecember 26, 2012, so far they have gained many admirable achievements,received lots of high praises for their milk quality by using foreigntechnological technique and becoming a worthy competitor against otherlong-standing dairy brand What helps this dairy company achieve so manyrapid successes in the Vietnamese dairy market?

- TH True Milk Company, all so known as TH Milk Food Joint Stock

Company, belongs to TH Group The enterprise was established under thefinancial advice of Bac A Commercial Joint Stock Bank Entering theVietnamese market since 2010, the company always aims to produce themost authentic "fresh milk" products

- For only 12 years, TH True Milk has achieved many proud achievements In

2013, the company inaugurated a clean fresh milk factory with a capacity of500,000 tons/year Dairy cows are raised according to high technologystandards, with more than 45,000 cows carefully selected from New Zealand,Australia, Canada, etc

- During following years, TH won the love and trust from consumers and local

 “Viet Nam’s High-Quality Product” prize for three consecutive years of

2012, 2013 and 2014

 “Reliable Supplier in Viet Nam 2011”

 “Prestige Brand”

 “Agriculture Enterprise applying High-tech”

 “National Golden Quality Prize 2013”

 “Trusted Brand” by National Quality Assurance Agency

Mision and vision statement:

a) Mission:

- With the spirit of being close to nature, TH Group has put all its effort to

nutrify Vietnamese people body and soul by providing food products derivedfrom nature which are clean, safe, fresh, delicious and nutritious

b) Vision:

- The TH Group aims to become Vietnam’s leading manufacturer of farm

product Nowadays TH cluster is that the second-ranked farm manufacturer,

behind Vinamilk JSC, in Vietnam The core of the strategy of the cluster isanchored within the conception of “True Milk” or “True natural Milk” (thật

sự thiên nhiên), i.e it doesn't use powder milk for process The corporate ispleased with the actual fact that: All product area unit made up of “freshclean pure milk” created within the TH industrial farm (Hoàn toàn tư sữatươi nguyên chất của trang trại TH) For this reason, all the product area unit

oversubscribed below the complete “TH True Milk”

Production Process:

- Desire to bring fresh, clean, delicious and nutritious dairy products tovietnamese consumers TH recognizes the quality of milk as an importantfactor in production and development By applying the world's end-to-endtechnologies into the entire closed production process TH’s products alwaysensure the criteria of freshness, keep the essence of nature intact and meetinternational material standards

Bu sin ess

activities:

- The company has introduced to the market more than 70 products on the

basis of fresh milk The company is always aiming for the path of clean freshmilk products, clean food, and clean drinks

- According to retail measurement data of the whole market in November

2018, TH True Milk milk grew by nearly 22% in volume and 30% inrevenue Up to now, TH True Milk's market share in the fresh milk segment

in urban retail channels has reached 40%

- Since 2017, TH True Milk Company has made leaps and bounds in business.

Net profit in 2017 was 319 billion VND, in 2018 it was 450 billion dong.Within 5 years from 2014 to 2018, TH's net profit increased 15 times

- In 2018, TH Company reached the revenue milestone of more than 7,000

billion VND, faster than the roadmap set by the leadership This achievementwas achieved thanks to the outstanding growth of fresh milk products Afteronly 10 years, the amount of milk in the country increased significantly,helping to reduce the number of imported powdered milk to be reconstitutedfrom 92% in 2008 to more than 60% at the present time

- On January 31, 2018, TH True Milk Company inaugurated the first

high-yielding dairy farm in Moscow, Russia This is a project within theframework of the complex of dairy farming, high-tech milk processing and anumber of food projects with a total investment capital of up to 2.7 billionUSD of the company in the Russian Federation

The founder:

- The founder and Chairman of the Board of Directors of TH Dairy Foods

Joint Stock Company is Ms Thai Huong - Top 50 most powerfulbusinesswomen in Asia Ms Huong is the leader and driver of TH Milk FoodJoint Stock Company to achieve the success it is today

- However, she decided to step back behind the scenes to work as a consultant

for the enterprise's business activities after more than 10 years of working

Products:

- Milk products: UHT fresh milk, pasteurized milk, formula fresh milk Th

Topkid, TH True yogurt, TH True nut

- TH True Butter, TH True Cheese

- Beverage: TH True Rice, TH True juice, TH True juice milk

- TH True Water

- Food: Japonica FVF rice, NASU sugar

- Ice cream

II MARKETING ENVIRORNMENT:

MICRO MARKEITNG ENVIRONMENT:

b) Customer:

- TH's customers are families with young children with moderate or higher

income In addition, it is also aimed at young people who like naturalproducts, aged from 15 to 25

- TH is under a lot of pressure from customers:

 Price pressure: customers always want to buy cheap but good qualityproducts

 Quality pressure: customers want quality products, especially pasteurizedproducts such as milk

c) Collaborator:

 Collaboration with HAGL: Why HAGL brand?

- Becoming a leader in agriculture filed as farm sugar cane, rubber

- 70% cost of cow farm is food for cows, HAGL able to use sub-productionsthrough sugar-cane farm and corn

- Owner more than 100.000 hectare agriculture land in Vietnam, Lao,Cambodia

- HAGL interested in cow farm and intend to use 30.000-hectare land for it

- HAGL already have project for cow farm & factory in Laos

- Agriculture structure of HAGL in Laos already set up in few years ago Now,this system run smoothly and upgrade with stable work

- HAGL is well-known brand in Vietnam

- This Group has a chairman who has business theory very aggressive Hisdetermination always keeps direction to target long-term vision It is veryimportant in milk market and TH true milk

- TH true milk target increase factory power and revenue It need a healthyfinancial in long way The cash flower return lower than other major

- In milk market, HAGL have not entered this market And they also have notplan to sale milk, their goal is 50% sales beef meat and 50% milk sources

- Collaboration with HAGL as Joint venture cow farm This is first step ofexpand production size of TH True Milk We believe that TH True Milk willcompetitive massively in fresh milk after 2 years of collaboration

- TH True Milk will borrow bank 100M$ for first part and use 50M$ from

capital It protects safely financial status

- After 2st Part, totally TH True Milk become 1st number of cows more than

200.000

- This result will match company target in 2017 with gaining 50% number of

cows in VN

- Cost saving compare with set up factory without collaboration It also reduce

risk in operation, financial half

 Tetra Pak and Combibloc:

- Famous packaging technologies from Sweden and Schweizerland had

been considered as a proof of clean, sterilized milk Their respectabilityare much suitable for Vietnamese routine use of the milk carton bottle



 Afimilk (Israel’s leading milk technology producing group):

facility uses technology from global leaders such as Siemens, Danfoss andGrundfos The facility is part of TH true Milk’s $1.2 billion hi-tech dairycow and fresh milk processing project, making it the most advanced of itskind in Southeast Asia TH true Milk also has a 200-tonne per day milkfacility in the northern province of Hung Yen which began operations in2010.

d) Competitor:

- Domestic dairy companies: Nutifood,

Vinasoy, etc

 Strength: Understand the

consumer culture, quite modern

production technology, high

product quality, reasonable price

 Weakness: Haven't created a strong brand, products are not

diversified, lack of management experience, limited vision, notenough raw material resources

- Foreign dairy companies: Nestle, Abbott, etc.

 Strength: strong brand, strong product quality, large capital,

diversified products, large distribution channels, modern productiontechnology, skilled workers

 Weakness: still not understand well the new market, have not

overcome the cultural and political barriers, the price is quite high andhave to be imported

 Vinamilk: Vinamilk is the top of companies ranking in Vietnam about

manufacturing not merely milk but also many products from milk

- Strength:

 Manufacturing technology achieves international standards

 Continuously developing advanced products.

 System of distribution and selling covers many areas

 A familiar brand and trusted by Vietnamese consumers for more than

34 years

 Highly effective marketing

 Diversified product portfolio, largest market share in Vietnam Việt

 Wide distribution network with many distribution channels according

to different models

 Strong financials

 Modern equipment and technology

- Weakness:

 Meet difficulty in focusing the kind of natural milk

 Haven't mastered the source material yet

 The market share of powdered milk is not high and cannot competewith competitors in the same industry



 Dutch Lady: So far Dutch Lady Vietnam has a large market in whole

Vietnam In there, Dutch Lady have many market segments followingthe age including the small child, child, teenager and adult; followingthe kind of milk products consisting on sterilized milk, condensedmilk Because Dutch Lady makes menu segments, they set slogan forthe natural milk which is called: “Ready for life!” and for impressingtheir various products for all age which is called: “cùng bé yêu khônlớn” to distinguish with other IQ’s messages

 Constantly improve products.

 Distributing system covers many areas

 Locating a power position of brand name

 Strong brand, understand people's consumer culture

 High quality products

 Good customer care system, reasonable prices, diverse products

- Weakness:

 Not having the ability to self-control the source of raw materials

 The quality of raw materials cannot be managed, unstable

 Creating barriers for dairy farmers

 Not having a large market share in the powdered milk segment

e) Company:

- TH True Milk was established in 2008 The meaning behind the name TH is

True Happy (“Hạnh phúc đích thực” in Vietnamese) Even so, some peoplethink it refer to Thái Hương – the founder of the company

- The TH True Milk project was started in 2009 with the import of Israeli dairy

technology and thousands of cows from New Zealand From that point on,that business began to grow rapidly

- Today, the enterprise has become a leader in the production of "clean" fresh

milk, with a herd of up to 45,000 cows imported and cared for under aspecial regime

- In December 2010, TH True Milk was officially introduced to the market By

2013, this company has achieved accumulated revenue of approximately6,000 billion VND The revenue of 2013 alone reached 3,000 billion VND

- And after the success of TH True Milk project, the business has also invested