A REPORT ON ANALYZING AND PROPOSING MARKETING STRATEGIES FOR PASTEURIZED FRESH MILK OF MOC CHAU MILK IN VIETNAM

Not only does the Vinamilk brand offer various products ranging fromcore dairy products like liquid milk both UHT and pasteurized fresh milk to value-added dairyproducts like drinking an

VIETNAM NATIONAL UNIVERSITY INTERNATIONAL SCHOOL

TABLE OF CONTENTS

CHAPTER 1: EXECUTIVE SUMMARY 4

1 Overview of this marketing plan 4

2 The reason we selected moc chau milk for our research 4

CHAPTER 2: COMPANY’S OVERVIEW 5

2.1 Introduction 5

2.2 Business Model Canvas 8

CHAPTER 3: CURRENT MARKETING SITUATION 12

3.1 Marketing Environment 12

3.2 Competitive Situations 16

3.3 Current STP Analysis 18

3.4 Current Marketing Mix (4P) 19

CHAPTER 4: SWOT ANALYSIS OF MOC CHAU MILK 22

4.1 Strengths 22

4.2 Weaknesses 24

4.3 Opportunities 24

4.4 Threats 26

CHAPTER 5: OBJECTIVES AND ISSUES 28

5.1 Common goals in one next year (from 6/2022 to 6/2023) 28

5.2 Ideas for marketing strategies for Moc Chau Milk pasteurized fresh milk products 28 CHAPTER 6: MARKETING STRATEGIES IN NEAR FUTURE FOR PASTEURIZED FRESH MILK OF MOC CHAU MILK 31

6.1 STP Analysis 31

6.2 Marketing Mix (4P) 33

CHAPTER 7: ACTION PROGRAMS AND BUDGET 35

CHAPTER 8: CONTROLS 37

CHAPTER 9: CONCLUSION 38

REFERENCES 39

WORK BREAK DOWN STRUCTURE

Lê Thị Ngọc Linh

Chapter 2, 4 + STP Analysis(Chapter 6) + Write reportand edit other parts

100%

CHAPTER 1: EXECUTIVE SUMMARY

1 Overview of this marketing plan

We will describe a 1-year marketing plan for Moc Chau Milk pasteurized fresh milk from1/6/2022 to 1/6/2023 In order, we referred to the current information and data which is in 2021.This report is divided into 9 CHAPTERS

For these chapters, we will show the following report will analyze the current marketingsituation in the macro environment, market strategy, marketing mix, and SWOT of Moc ChauMilk, specifically in the current Vietnamese market This report also will cover new marketingstrategies and new objectives for the pasteurized fresh milk products In addition, its major actionprograms and budgets are also recommended to advertise products and promote sales, revenue,and profits by 2022

2 The reason we selected moc chau milk for our research

We have two main reasons to select Moc Chau Milk for our research The first reason is

we think it’s better to propagate ordinary Vietnamese milk rather than international milk Thesecond reason is that Moc Chau Milk’s quality is maintained by the company’s efforts and bysome high institutions What we discovered recently is that Vietnamese people tend to prefer todrink imported milk from overseas because people think Vietnamese milk is not well maintained.Although, it’s different from Moc Chau Milk’s case It’s already being pasteurized as a beverage

CHAPTER 2: COMPANY’S OVERVIEW 2.1 Introduction

Moc Chau Milk (MCM), or Moc Chau Dairy Cattle Breeding Joint Stock Company, is one

of the most famous, largest and oldest domestic dairy brands in the North and Central regions ofVietnam, as well as one of subsidiaries which is indirectly owned by Vinamilk throughGTNFoods Joint Stock Company (Moc Chau Milk’s Annual Report, 2019) The Companysupplies, processes and manufactures a wide range of dairy products, primarily milk and yogurt.Moc Chau Milk, formerly known as Moc Chau Military Farm, was established on 8thJanuary, 1958 with the task of raising dairy cows, providing dairy cow breeds, manufacturingand processing dairy products, and producing livestock feed It is also the first unit whichinitiates an animal husbandry and dairy producing industry in Vietnam The Company currentlyoperates 02 pasteurization and sterilization factories that produce and package high-quality,nutrient-dense dairy products using imported modern processing equipment from Tetra Pak(Sweden) and completely sterile automatic packaging technology from Korea Taking advantage

of the Moc Chau plateau's perfect climate and soil, Moc Chau Milk owns more than 27,138 dairycows from over 600 dairy farming households and 03 dairy breed centers To ensure the quality

of raw milk materials, all dairy farms must commit to fully meeting 73 strict criteria of theVietGAP1 process on dairy cattle raising, ranging from food and water management to livestocksanitation Before being purchased at the 21 milk collection places throughout the livestock area,all milk expressed from cows will be preliminarily tested and checked by Moc Chau Milk’sexpertise team based on 10 quality criteria The purchased milk will be refrigerated and

1 VietGAP: Vietnamese Good Agricultural Practices.

transported immediately to factories, where it will be manufactured and packaged before beingdelivered to consumers across the country.

Product portfolio of this dairy brand is fairly diverse, including fresh milk products,products made from milk Not only does the Vinamilk brand offer various products ranging fromcore dairy products like liquid milk (both UHT and pasteurized fresh milk) to value-added dairyproducts like drinking and spoon yogurt, milk cakes, pure butter, cheese and milk scum, but italso caters to the different needs of children, as well as other uses such as bartending, baking andmaking desserts Moc Chau Milk’s products must all go through a rigorous quality managementprocess based on ISO2 and HACCP3 international standards to ensure that they fulfillinternational quality requirements for food safety and hygiene, thereby meeting almost allnutritional needs of consumers which are increasing day by day

The Vietnamese dairy market is usually a competitive industry, drawing a lot of interestand investment from enterprises Moc Chau Milk presently holds roughly more than 2% of thecountry’s milk market share and 23% of the milk market share in the North market afterVinamilk and TH True Milk, according to the Company’s Annual Report 2021 Although thesenumbers are a modest amount in comparison to other domestic and foreign dairy brands in theVietnamese market, the Company nevertheless has a significant presence in the Vietnamesedairy sector, with over 60,000 retail stores In the context of worldwide socio-economicinstability and struggles due to detrimental impacts of the Covid-19 pandemic, the supply chaincrisis has caused serious damage to many businesses around the world, including Vietnam.Domestic demand for dairy products, on the other hand, is less impacted because milk is anessential product, and people's demand remains to increase for more fresh milk and yogurtduring epidemics As a result, some fortunate dairy businesses have been able to maintainpositive revenue and profit levels Moc Chau Milk has put a lot of effort into developing therevenue growth over the last 02 years Unlike 2020, net revenue increased by 3.6% to VND2,926 billion, and profit after tax increased by 13.7% to VND 319.1 billion in 2021 Mrs MaiKieu Lien, Chairwoman of the Board of Directors of Moc Chau Milk, stated that the Companyhas been promoting the core strengths of the sustainable and self-contained agricultural valuechain, developing high-tech dairy cow breeding projects, investing in a modern milk processingfactory, and increasing the quality of raw milk materials in order to bring healthy products andincrease resistance to improve the quality of life of Vietnamese families Moc Chau Milk hasalso been working on enhancing the distribution and sales system, being flexible in coordinatingproduction plans, ensuring the supply of commodities, and focusing on implementing both short-term and long-term investment and development initiatives

Vision, Mission and Values

2 ISO: International Organization for Standardization.

3 HACCP: Hazard Analysis and Critical Control Point System.

Connection - “Moc Chau Milk is proud to be a company that has a solid relationship with

farmers, creating the highest value for their products.”

Innovation - “Constantly learning and embracing the quintessence of technology in order

to retain the full delicious taste and nutritious quality in each product.”

Trust - “Moc Chau Milk thrives on the trust of its entire workforce, consumers' confidence

in the product's quality, and its partners' and shareholders' deep faith and seriousness for the Company.”

Responsibility - “Moc Chau Milk recognizes that success can only be achieved by always

attempting to add value to the lives of consumers while also acting responsibly toward the environment and society as a whole.”

In gist, through 64 years of establishment and development, Moc Chau Milk hasconfronted challenges and overcome limits to continuously transform, evolve and thrive Whenthe vision, purpose, and core values all come together at the intersection point, it can beconcluded that this Company is not only steadily affirming the position of the Vietnamese dairybrand in the domestic market but also strengthening its competitiveness when reaching out to theglobal market Along with that, Moc Chau Milk increasingly demonstrates positive imprints inbringing values to the community, in the direction of a better and more sustainable development

Other information

Moc Chau Milk’s CEO: Mr Pham Hai Nam

Address: Moc Chau Farm Town, Moc Chau District, Son La Province

4 “Green grassland - Fresh cool milk”: “Thảo nguyên xanh - Sữa mát lành”.

- Distributors, wholesalers, retailers, stores & supermarkets

- Schools, canteens & bakeries

- General trade: distributors, wholesalers and retailers

- Modern trade: supermarkets and convenience stores

- Online stores: Shopee, Lazada, Tiki, etc

- “Cửa hàng sữa tươi Mộc Châu Milk” showroom system

Customer

- Customer service staff communicate with customers through

mobile phones, social media, etc

- They listen to all its customers' suggestions and complaintspatiently

- They support to exchange and return products

- Moc Chau Milk conducts a number of programs/funds to assistunderprivileged youngsters all around the country

Revenue Streams

- Sales of finished and merchandise goods

- Sales that are related to parties/stakeholders

- Other services

- Other revenues

Key Resources

- Raw materials developments (dairy farms, farmers, cows & milk)

- Distributors & retailers

- R&D expertise

- Financial resources (shareholders & investors)

- Factories

Key Activities

- Process, manufacture, distribute and retail dairy products

- Raise cattle and cultivation

- Develop new products to innovate and diversify product types

- Build farm systems integrated with advanced technologies and

- Expand market and increase revenue and profit

- Promote R&D activities, develop organic foods and apply advancedbiological technologies

- Advertise and brand products

Key Partners

- Farmers & dairy farms

- Vets

- Distributors & retailers

- Foreign partners who support the activities of exporting andimporting

- Associations & NGOs

- European suppliers for advanced machinery & equipment system

- Government

Cost Structure

- Employee salaries

- Provision for severance allowance

- Raw materials costs

- Machinery & equipment costs

- Manufacturing & packaging costs

- Warehousing & transportation costs

- Utilities costs (electricity, water, heating, etc.)

- Cost of cow vaccination for the dairy farm system

- Depreciation costs

- Taxes, charges and fees

- Cost of support, advertising & promotion

- Cost of product invention & development

- Additional costs

CHAPTER 3: CURRENT MARKETING SITUATION 3.1 Marketing Environment

3.1.1 Microenvironment

a Enterprise

Moc Chau Milk is currently chaired by Mrs Mai Kieu Lien as the Chairman of the Board

of Directors with many years of experience in the industry, so it can be seen that the building ofrelationships and the ability to coordinate with departments is very good Since participating inthe governance of Vinamilk from the beginning of 2020, Moc Chau Milk has recordedsignificant growth with significantly improved operational efficiency The Company has a board

of directors with many years of experience in the industry to help the Company grow anddevelop

b Supplier

The supply of fresh milk materials: Moc Chau Milk has built a closed system of livestockfarms to supply its own milk processing factory Besides always accompanying farmers, MocChau Milk has been associated with nearly 600 farmer households for many years, bothtransferring modern breeding technology and establishing an insurance fund Milk prices,livestock insurance, output for quality milk help farmers feel secure in production In addition,the company also invested hundreds of billions of VND to build the first modern production

plant, breeding center, and the first modern TMR animal feed factory in Vietnam

Self-manufacturing of raw materials makes the company not have to worry about shortage of rawmaterials and reduce the cost of importing raw materials

c Marketing intermediaries

The distribution intermediaries of Moc Chau Milk are distributors, wholesalers, retailers,organizations and businesses such as supermarkets, dairy agents, grocery stores, etc Theselection of intermediaries Marketing for a company is not an easy task Product distributors areresponsible for bringing products to consumers These intermediaries create favorable conditionsfor consumers to access products by displaying Moc Chau Milk's products This will contribute

to promoting the image of Moc Chau Milk, creating convenience for the sale of products whencustomers have a need to buy and use the product, contributing to increasing sales for Moc ChauMilk Thanks to agents and retailers, the Company has reduced a huge cost compared to openingits own sales showrooms

d General public

Moc Chau Milk's PR activities are mostly associated with social activities, communitydevelopment and programs associated with young children, typically with programs such as:

Miss Dairy, Moc Chau Milk: Accompanying the family in a new normal life with the slogan:

"Moc Chau Milk - Green grassland with cool Milk" In all communication activities in generaland advertising in particular, the message "The essence of nature is kept intact in every drop ofclean fresh milk" The main advertising activities of Moc Chau Milk must be mentioned such as:Broadcasting TVC on TV channels VTV3, VTV1, VTV6, HTV7, SCTV2, with images of theproduction process of clean fresh milk

e Customer

Talking about customers and distributors, the biggest problem is undoubtedly the price,they can compare products in the same industry to create price pressure on the manufacturer The

number of buyers will directly affect the revenue and brand of Moc Chau Milk The Company in

the eyes of customers is a clean milk product from nature, so it is very accessible to customerswho care about health

Scale of Vietnam's liquid Milk market in the period 2014-2018

Liquid milk market excluding other dairy products such as yogurt, cheese, ice cream,butter, powdered milk, in 2018, revenue reached VND 48.9 trillion, with a stable growth rate of10% CAGR is predicted to decrease but still close to 7% to reach 66 trillion in 2023 Due tolimited income sources and distribution conditions, dairy products are being skewed towardsurban populations in terms of sales as well like product variety Therefore, the rapidly growingpopulation size opens up a large market for Moc Chau Milk, creating opportunities to consumeproducts and increase sales The population in urban areas increases, leading to improved livingstandards This also creates opportunities for dairy businesses in the market with great potentialand growing

b. Economic

Vietnam is considered as a country with the highest demand for milk in the world, withgood premises such as stable economic growth, annual GDP per capita increase of 6-8%,population growth on average 1% However, domestic raw materials for milk production inVietnam are still low, only meeting about 20% of market demand Most companies producingfinished milk have to import raw milk And while the retail milk price in Vietnam is always at avery high level compared to the region and the world, the price of raw milk from companies forfarmers is very low In fact, the dairy market in Vietnam has emerged 3 big companies,accounting for 75% of the market share and they seem to have an advantage when negotiatingprices with farmers, as well as offering the desired selling price of finished milk Domestic raw

materials only meet 20% of market demand Meanwhile, Moc Chau has milk that can produce itsown ingredients, so there is no need to worry about material supply problems.

c. Politics & Legal

The stable political situation of Vietnam is decisive in creating and implementing MocChau Milk's marketing strategies After the doi moi period, Vietnam officially normalizedrelations with China in 1992 and with the United States in 1995 joining the ASEAN bloc in

1995, Vietnam has established diplomatic relations with 171 countries The most importantturning point was January 11, 2007 Vietnam officially became the 150th member of the WTO.The above events have had a significant impact on market expansion as well as attractinginvestors, increasing revenue from which to launch marketing strategies of Moc Chau Milk

d. Cultural and community

In Vietnam, consumers have the habit of using sweet products as well as canned products

or milk-related products The access of the source becomes easy through radio speakers,newspapers, television, etc Therefore, marketing, advertising and distributing products tocustomers becomes more convenient One of the characteristics of Vietnamese people's concept

is that they often use what they feel secure about prestige and quality, so they rarely change.Therefore, when Moc Chau Milk creates a brand of natural milk, it will be easily accepted byconsumers

e. Science and Technology

In order to achieve that success, Moc Chau Milk plays the role of a technical trainingcenter and transfers scientific technology to farmers, helping them access advanced science andtechnology to apply in animal husbandry All nearly 600 households of Moc Chau Milk meetVietGap standards, apply breeding technology to European standards with milking machines,and feed the cows nutritional standards with TMR feed, American Alfalfa grass, fine food, freshgrass, automatic waste treatment system that does not pollute the environment, etc In particular,Moc Chau Milk has always maintained an insurance fund for livestock and milk price insurancefor many years, in order to best protect the interests of farmers so that they can confidentlyproduce

Moc Chau Milk transfers scientific technology to farmers to apply in animal husbandry,making the milk production process more developed and more efficient than the company's rawmaterial problem

Moc Chau Milk pasteurized fresh milk with new pasteurization line and technology ismarked by the launch of many products with the current packaging design of paper boxes, plasticbottles and bags because of the convenience for users

Moc Chau Milk's raw milk source is obtained 27,138 dairy cows raised at 03 breedingcenters and nearly 600 farms of farmers affiliated with the company 100% purebredHolstein Friesian cows originating from Cuba, Canada, USA, Australia, Israel, whichbring the sweetest taste of milk.

With pasteurization technology at a temperature of 95 degrees Celsius in a short period oftime, fresh milk is pasteurized while keeping vitamins and important nutrients

Poured into high-grade preservation paper boxes by the multinational EvergreenPackaging, Korea, Moc Chau Milk pasteurized fresh milk can now be used for up to 15days at a temperature of 4-6 degrees Celsius

f. Nature & environment

Vietnam's climate is tropical and monsoonal, which will create challenges for the dairyindustry Perishability, easy to deform of milk if not preserved and handled in time Thisadversely affects the quality of the milk This sets forth a requirement for a specific strategy topreserve milk and produce high quality products Besides, the nature of the climate also hasadvantages, that is, the climate is very favorable for farming, creating a source of raw materialsfor production This point can also create enough raw materials to meet the production This is anopportunity as well as a challenge for Moc Chau Milk If Moc Chau Milk grasps and knows how

to overcome it, this is indeed a good thing This will help them reduce the cost but the quality ofmilk remains unchanged

3.2 Competitive Situations

3.2.1 Competitor Analysis

There are 2 types of competitors, which are:

- Direct competitors: The industries that have been operating in the industry have a stronginfluence on the business situation of Moc Chau Milk enterprises

- Potential competitors: Companies specializing in the production of substitute productssuch as: cereal flour, functional foods (IMC, DOMESCO, BIBICA, etc.) but the potential is notstrong enough to compete with milk products

Moc Chau Milk company is currently facing relatively high and fierce competition fromdomestic and foreign milk brands such as Vinamilk, TH True Milk, Dalat Milk, Dutch Lady,Nestlé, Abbott, Meiji The future dairy market will continue to expand and the level ofcompetition will increase

By type and product characteristics: There are many dairy brands in Vietnam's dairymarket, including both domestically produced and imported dairy products In which, Vinamilkand Moc Chau accounted for 45%, Dutch Lady accounted for 24%, 22% were imported

powdered milk products such as Mead Johnson, Abbott, Nestlé, and the remaining 19% weredomestic brands such as Hanoimilk, TH True Milk, Nutifood.

Below is the competitor analysis table of Moc Chau Milk We are divided into 3 groups:Vinamilk (big competitor), domestic dairy companies, and foreign dairy companies

Vinamilk

- The strongest, most standing and reputable brand

long Understand people'sconsumption culture

- Good customer care system,reasonable prices, diverseproducts

- Lack of self-control in thesupply of raw materials

- Unable to manage the quality ofraw materials

- The distribution system is stilllimited

- High price

- All products must be imported

Moc Chau Milk is facing a lot of competition in the dairy market with many big brandsthriving in the market, making it difficult for Moc Chau Milk's products to reach consumers

3.2.2 Competitive Strategies

According to Mintel Group, the domestic dairy market is estimated at $4.4 billion and isbeing driven by three main trends: Brand credibility, Brand credibility, Healthy taste andDiversification seeking.

These trends show that more and more consumers are concerned about food health andsafety 89% of Vietnamese consumers are willing to pay higher prices for quality food, according

to Nielsen Up to 88% of consumers carefully read the information on the packaging of dairyproducts before buying, and 80% are concerned about the long-term impact of "artificial"ingredients in milk

Understanding consumer psychology is the basis for Moc Chau Milk to continuouslylaunch a series of new products All are made entirely from pure fresh milk with naturaldelicious taste, no preservatives are used From 2018 to now, Moc Chau Milk has launched manynew products to the market such as: Pasteurized Banana Flavored Milk, Guava Drink Yogurt,Taro Yogurt and Pasteurized Low-Sugar Milk

Thanks to the right long-term vision, Moc Chau Milk currently holds about 10% of themarket share in the dairy market For the Northern region alone, this rate is 35% In addition,Moc Chau Milk Company is one of three selected units to export fresh milk to the Chinesemarket, along with a plan to enter the southern market in 2019, bringing fresh milk from theprairies green closer to Southern consumers

3.3 Current STP Analysis

3.3.1 Segmentation

The market segment of Moc Chau Milk is divided into 4 age groups: 0-6 months old, 6-12months old, 1-3 years old and over 3 years old There are specific types of milk for eachaudience such as: people with special nutrition, pregnant women, people who use diseases,people with diabetes The division of these objects is based on segmenting the market according

to the behavior, reasons and usage needs of the customer groups

3.3.2 Target Market

Moc Chau Milk always brings the best quality, nutritious and delicious products for thehealth of consumers Most of Moc Chau Milk's products are suitable for all ages Strong productlines for children and teenagers because this age group has a great demand for milk andconsumption of dairy products is the largest Moc Chau Milk divides the target market into 2main customer groups:

- Group of individual customers:

 Age: 0-6 months old, 6-12 months old, 1-3 years old and over 3 years old

 Occupation: All professions can be purchased and used.

 Lifestyle: As consumers, who have the need to buy and use pasteurized milkproducts

 Economy: Anyone can afford to buy Moc Chau pasteurized milk products

This is a group of customers with relatively high demand for products (good productquality, high nutritional value, reasonable price, etc.), they will be loyal customers if pasteurizedmilk Moc Chau Milk can meet their needs

- Organizational customer group:

This group is the distributors, wholesale and retail agents, shops, supermarkets, wishingand willing to distribute Moc Chau pasteurized milk products This is the group that hasrequirements for discounts, sales bonuses, and timely and timely fulfillment of orders related toproduct distribution

3.3.3 Positioning

In the 1980s, when Vietnam's dairy industry at that time was almost entirely dependent onimported raw materials, Moc Chau Milk cooperated with farmers to develop a herd of several

thousand cows With the longest experience in “raising cows - making milk” in the country, Moc

Chau Milk's products are distinguished by their ingredients entirely from pure fresh milk andhigh natural nutritional content Each year, Moc Chau Milk supplies to the market more than

100,000 tons of fresh milk “clean from meadow to table”, serving consumers across the country.

For pasteurized milk products, the preservation requirement is that the milk must be usedwithin 2-3 days after opening the box, thus ensuring the milk quality as well as the taste of theproduct In 2-3 days, not every customer can use up 1 box of 900ml, so Moc Chau Milk's launch

of a pasteurized milk product with a capacity of 250ml is a great competitive advantagecompared to other pasteurized milk manufacturers This carton pasteurized milk product willattract customers with low demand for milk during the day

3.4 Current Marketing Mix (4P)

- Do not use genetically modified varieties.

- No antibiotic residue

- Many nutrients are preserved, especially antioxidants

- Meets European organic standards

- Rigorous process

b Stages of the product

Introduction stage: Faced with many difficulties because it is the first enterprise dealing in

pasteurized milk, when introducing products, consumers are not aware of pasteurized milk andpasteurized milk, making the product introduction not attract much attention After several times

of reinforcing consumer awareness, the product was well received Moc Chau Milk has built abrand of pasteurized milk that is beneficial for health and nutritious

Development stage: There are many more competitors, but Moc Chau Milk still develops

and maintains its position because of the image of clean milk and the leader in the field ofpasteurized milk with consumers

Maturity Stage: Revenue continues to grow but more slowly Once the product has been

perfected, the enterprise is trying to develop strategies so that dairy products in general andpasteurized milk in particular can capture market share in our country's dairy product industry

- Application of many advanced technologies

- Meeting the demand for food quality and safety

- Cost of input materials

- Selling expenses account for the second largest proportion of milk prices.

b On-demand pricing

- Demand for products has grown steadily

- The tendency of Vietnamese consumers to choose the most expensive products possiblealso contributes to the increase in product prices

- Must learn, analyze carefully about customers, product goals and customer acceptability

c Price leader