Topic vinamilk’s marketing strategy analysis

Untitled MKT101 Group 2 Vinamilk Marketing Principles (MKT101) 0 0 FPT UNIVERSITY MINISTRY OF EDUCATION AND TRAINING MARKETING PRINCIPLES GROUP 2 ASSIGNMENT TOPIC VINAMILK’S MARKETING STRATEGY ANALYSI[.]

MKT101 - Group 2 - Vinamilk Marketing Principles (MKT101)

FPT UNIVERSITY MINISTRY OF EDUCATION AND TRAINING

MARKETING PRINCIPLES

GROUP 2 ASSIGNMENT

TOPIC:

VINAMILK’S MARKETING STRATEGY ANALYSIS

Group’s members and ID

1 Nguyen Thai Son SS170180

2 Ngo Thien Nhan SS170307

3 Dam Phuong Nghi SS170310

4 Hoang Gia Thuyen SS170303

5 Cao Thi Huong Giang SS170110

6 Ngo Pham Phuong Thao SS170183

Ho Chi Minh, 25 March 2022

TABLE OF CONTENT

I INTRODUCTION

1 Market Trend and Overview

2 Company description

3 Product description : Vinamilk 100% Organic

3.1 Functions and features

3.2 Style and design

3.3 Market share

II COMPETITIVE AND POSITIONING ANALYSIS

4 Competitor analysis (Compare market share, strengths, weaknesses…)

5 Customer Analysis

5.1 Segmentations

5.2 Target Segments or customer portrait

5.3 Differentiation and Positioning Strategies

5.3.1 Differentiation

5.3.1.1 Image 5.3.1.2 Channel

5.3.1.3 Product 5.3.2 Positioning Strategies

5.3.2.1 Map 1: Price and Milligram of calcium in fresh milk

5.3.2.2 Map 2: Brand Awareness and Market Share 5.3.2.3 Value proposition

III MARKETING STRATEGIES ANALYSIS

6 Product

7 Price

8 Place

9 Promotion

IV CONCLUSION AND RECOMMENDATION

I Introduction

1 Market Trend and Overview

According to the Industrial Trade Information Center of the Ministry of Industry and Trade, according

to Euromonitor market research, Vietnam's milk consumption was 1.76 million tons in 2020, an 8.6% increase from 2019 Milk consumption is 26-27 kg, and the world per capita milk consumption is about

100 kg per year, which is quite a low rate, but the average per capita consumption in Asian countries

is 38 kg per year However, the growth of the local milk and dairy market is improving According to Kantar Worldpanel's market report, Vietnam's milk and milk demand is showing positive signs due to its young population, increased median income and increasing use of products that improve nutrition and enhance the immune system Grows Home consumers also tend to use branded products that are convenient and comply with food safety regulations

In 2020, the revenue of milk and dairy products in Vietnam reached VND64.4 trillion, an increase of 10.3 percent compared with that of 2019 The revenue is expected to achieve the growth of 7-8 percent yearly during the period from 2021 to 2025, reaching about VNĐ3.8 trillion in 2025 Of that, yoghurt revenue is expected to grow fastest with the compound annual growth rate (CAGR) of 12

percent per year (vietnam agriculture.nong nghiep.vn)

2 Company overview:

2.1 History:

Vinamilk was invented in 1976 From the 1980s to the 1990s, Winamilk won 3rd, 2nd and 1st class medals In the 2000s, Vinamilk was awarded the title of "Add Process Champion" and entered the Order of Independence III The company has also set up factories in many companies throughout Vietnam Vinamilk then applied new technologies and was awarded the Second Independence Medal in 2010 According to Vinamilk (2020), the company has expanded into ASEAN by launching the first Euro100 organic milk produced in Vietnam in mid-2020 During this period, Vinamilk's profits in the Asia-Pacific region exceeded $1 billion

2.2 General information:

The state-owned Southern Coffee Dairy Company, the company nationalized and acquired three privately owned dairy producers (Thong Nhat, Truong Ton and Dielac) in southern Vietnam, renamed in 1978 This product is made by Vietnamese people A dairy company founded in

1993 After listing on the Ho Chi Minh Stock Exchange, the company name was changed to Vietnam Commodity United Security Company (Vinamilk) Vinamilk's main products include milk milk, hammer milk, fresh milk, soy milk, yogurt and ice cream Vinamilk's main competitors are Dutch Lady Vietnam (Fleiceland Foods), Nestle Vietnam, Abbott, Mead Johnson (Reckett Benquiser), Friso and Nutty Food September 2016, Vinamilk and Chr Signed a strategic cooperation agreement Probiotics developed by Hansen

Vinamilk is the largest dairy company in Vietnam Grounded on the UNDP 2007 Top 200 largest enterprises in Vietnam report, it was also the 15th largest company in Vietnam and formerly the most precious public company listed in Vietnam In 2010, it's the first company in Vietnam to be included in the Forbes Asia's 200 Stylish Under A Billion list that highlights 200 top- performing small-and mid-sized companies with periodic profit under 1 billion dollars

2.3 Development strategy:

Sustaining the No.1 position in Vietnam request and aspiring to be in the Top 30 of World’s Largest Dairy Companies in terms of profit, Vinamilk has set up 3 primary targets to achieve diversifying portfolio grounded on consumers' preferences, retaining leadership within the dairy assiduity in Vietnam and getting the leading dairy company in the Southeast Asia (Vinamilk 2020)

2.4 Mission Statement :

Vinamilk solicitations to raise health mindfulness and to ameliorate physical conditions of their consumers They commit to deliver the best- quality nutrition to communities with respect, love and responsibility (Vinamilk 2020)

3 Product overview:

3.1 Functions and features:

Vinamilk's liquid products, including Vinamilk 100% Organic, are nutrient-rich beverages Due to the presence of a variety of essential nutrients including Calcium, Protein, Vitamin A, Vitamin D, Magnesium, Phosphorus, Potassium, their products help strengthen our bones, prevent osteoporosis, boost the overall metabolism of our body, keep us hydrated and nourish our skin (Vinamilk 2016)

3.2 Style and design:

The package of most Vinamilk's products, including Vinamilk 100% Organic, is straightforward, simple and eye-catching with a distinctive logo and a combination of three primary colours including green, blue and white Their appearance is not only appealing to customers but also increases brand recognition in the market (IBN 2017)

3.3 Market share:

Thanks to intensive competitive campaigns and a diversified portfolio, Vinamilk's liquid milk products are more appreciated and favoured in the Vietnam market compared to its rivals such

as TH True Milk (CEO 360) Vinamilk has dominated this market with a nearly 40% value share

in 2020 (Euromonitor 2020)

II Competitive and positioning Analysis

4 Competitor analysis (Compare market share, strengths, weaknesses…)

● Vinamilk has stood strongly in the dairy

industry for over 40 years and continued to

grow to define itself as the top milk brand in

Vietnam Not only for Vietnamese customers,

but also Vinamilk is exported overseas

● Growing numbers of competitors are not only world's famous dairy companies but also rising domestic brands

● The membership of Vietnam with WTO and ASEAN assists other foreign brands to

● Vinamilk is the biggest milk production

company in Viet Nam and accounts for 37%

of the market share

● Despite the high quality products, the milk’s

price of Vinamilk is reasonable and suitable

for consumers’ demographic and with various

kinds, for example, 100% organic milk,

premium milk,etc

● Its marketing campaign is methodical and

professional with different activities such as

“Sua hoc duong”, “One million trees VietNam

fund”

● While other companies are having

problems, Vinamilk has an extremely good

fund structure and autonomous financials

● Vinamilk produces a natural source of fresh

milk as well as having an organic and

internationally standardised cow’s farm

penetrate into Vietnam's market

● Due to the ATIGA and Vietnam EAEU FTA decree to eliminate tariffs on dairy products including liquid milk

● Challenge to expand the distribution, according to World Bank Data, 70% of the total population live in highland regions Hence, this is a big barrier for both Vinamilk and consumers to deliver and get access to the products, especially in terms of keeping UHT milk in good quality

● Milk is the product category consisting of price registration and price stability, which makes Vinamilk hard to control the output price

● Pressure from environmental responsibility

to save energy

● Requirement to keep the company updated due to frequent customers' changing preferences in packaging and drinking trends

● The source supply of raw dairy milk can not

fulfil the production demand

● Investing in organic farms and importing

dairy cows abroad costs a large amount of

money

●Too many retailers but not every retailer has

good facilities to maintain the quality of milk

for a long time

● The Vietnamese government encouraging foreign investment helps Vinamilk attract investors

● Vinamilk factories equipped with international standards production lines not only reduce production time but also

increase output and product qualities

● Vinamilk constantly creates new flavours for their product that will help them reach bigger consumer markets

● Vietnamese consumers are interested in local brands

●Increasing living standards leads

to concern about nutrition and health among consumers

5 Customer Analysis

5.1 Segmentations

Segment Demographic Psychographic Behavioural Geographic

Children Age: 5-14

Gender: Male,

female and others

Lifestyle:

outdoor- oriented, prefer hanging out with friends

Personalities: Active,

curious, creative

Occasion: daily User status:

potential/daily users

Usage rate: daily Benefit sought:

provide nutritions that

is good for their growth

All over Vietnam

Young

adult

Age: 15-25

Gender: male,

female and others

Income: no income

or low income

Occupations:

college/university

students

Lifestyle:

lead a busy life because having a lot of tasks to do, do a lot of activities to satisfy their wants

Personalities:

energetic, enthusiastic, interested in novelty

Occasion: daily User status: first-time

users, regular users, potential users

Usage rate: regular,

daily

Loyalty: medium Benefit sought:

good for body growth, refill energy

All over Vietnam

Adult Age: 26-44

Gender:

Male, female and

others

Marital status:

Married, not

married

Family size: single

person or 3-4

people

Income:

Middle-High income

Occupation:Varies

Social class: Middle

and upper class

Lifestyle:

Desire to strike a work-life balance, usually stressful and busy,

Personalities:

Busy, creative, flexible, outdoor-oriented, energetic, sport-oriented

Occasion: daily.

User status: regular User rate: heavy user.

Loyalty: medium Benefit sought:

good for health, delicious taste, convenient

All over Vietnam

Density:

Average to High

Middle

age

women

Age: 40-60

Gender: female

Marital Status:

married

Occupation: either

work or retire

Income:

middle - high

income

Social class: middle

and upper class

Lifestyle: either busy

or unoccupied, care about health

Personalities: Calm,

caring, loving, happy

User status: first time

users/long time users

User rate: heavy

users

Loyalty: medium.

Benefit sought:

calcium in milk that helps maintain bones and a tough

skeletal structure

All over Vietnam from big cities to even small rustic areas

Density:

Average or High

The

elderly

Age: 65-70

Gender: mostly

Social class: middle

class, upper class

Occasions: In free

time, at gathering

Region:

suburban

Marital status/

Family size:

single, married with

children, married

without children

Occupation: most

have retired

Income: pension,

most live off their

children

Lifestyles:

well-organised, health- conscious, focusing on improving their

physical and mental conditions, seeking for peacefulness

Personalities: family-

oriented, realistic, sometimes aggressive

events

User status:

potential users

User rate: heavy

users

Benefit sought:

affordable, easy to buy, prevent osteoporosis, keep body hydrated, increase resistance, reduce fatigue

and rural areas

Density:

High

5.2 Target Segments or customer portrait

Vinamilk 100% organic has efficiently dominated the high-income segmentation by employing a concentrated marketing strategy

Vinamilk's primary target customer is children aged 5 to 14 (Vinamilk 2014) Vinamilk aims to improve children's physical health and to nurture young talents, as children are considered the future of a

nation (Vinamilk 2016) The first reason Vinamilk 100% organic chose this segmentation is the fact

that children make up around 23.2 percent of the population (Statista 2020) Secondly, the demand for milk in this segment is much higher than in other segments Because this age range is very important for the development of children At this age children need an amount of nutrients, vitamins, DHA, calcium to help the body develop in balance, creating a premise for later development On the other hand, parents always pay special attention to children at this age Therefore, the demand is high

Vinamilk itself has claimed their knowledgeable confidence in children aged from 5 to 14 years old but they are also expanding the target customers to all ages The middle-class population is growing, and they are beginning to focus more on the value of products rather than the price As a result, Vinamilk

is 100 % organic and could attract more customers (Euromonitor 2020)

5.3 Differentiation and Positioning Strategies

5.3.1.DIFFERENTIATION:

5.3.1.1 Image differentiation:

Vinamilk succeeds in building its brand-awareness with aggressive marketing campaigns and advertisements mainly concentrating on Vietnamese families (HBR Business School 2019) A campaign called ''Vinamilk 40 năm - Vươn cao Việt Nam'' in 2016, which was associated with

Vinamilk's CSR activities aimed to improve the physical health of Vietnamese children (Brands Vietnam) Vinamilk successfully conveyed the message that Vietnamese children would grow

up happy and healthy thanks to their high-quality products (Vinamilk 2016) In an advertisement named ''Sữa tươi Vinamilk Organic - Tươi ngon thuần khiết từ trang trại chuẩn Châu Âu trên cao nguyên Đà Lạt” in 2020, Vinamilk introduced the image of a high-quality product meeting

European standards which promised to bring nutrition to the Vietnamese families (Vinamilk 2020)

In addition to benefiting people’s health, Vinamilk also improves its brand recognition by exclusively focusing on social responsibility In “Quỹ 1 triệu cây xanh cho Việt Nam" annual campaign launched in 2012, Vinamilk has planted nearly 1 million of trees in Vietnam to date This does not only raise people's awareness of the environment but also helps fight global warming and pollution (Phap Luat 2020) The campaign "Bạn khỏe mạnh Việt Nam khỏe mạnh." co-operated by Vinamilk and VTV Digital in 2021 has targeted "Spreading a healthy and active lifestyle - Together contributing 10 billion VND to buy Covid-19 vaccines for Vietnamese

children” (Vinamilk.com) In “Vinamilk - Triệu bước đi, đẩy lùi Cô-vi” campaign in 2020, Vinamilk

gave away 60 000 medical masks, 6 000 hand sanitizers and more than 86 000 cartons of milk

to more than 6000 underprivileged children throughout Vietnam during the Covid-19 pandemic

(Bao Chinh Phu)

In terms of the brand's image, dancing dairy cows with funny, playful motion has become a featured icon for Vinamilk, which relates to the cows’ high living conditions During nearly 40 years in the dairy industry, Vinamilk logo has had some small changes but still preserves the meaningful message The logo is in 2 main colors: blue and white Blue symbolizes hope and trust; white for purity and pristine In the middle is the brand name “Vinamilk” in which “Vina” for Vietnam, covered with an Oval shape as shelter and safety The logo represents Vinamilk’s endeavour and determination to become the leading dairy company in Vietnam and provide its customers with the best products All outstanding benefits Vinamilk wants to bring to customers are transmitted in the most adroit way

5.3.1.2 Channel differentiation:

What highlights Vinamilk is its widespread reseller system which is an effective channel carrying the brand to customers.Vinamilk's liquid milk products have become popular and easy to find throughout Vietnam because it uses 3 main distribution channels The first channel is the supermarket system, from large supermarkets such as Co.opmart, Big C to small supermarkets such as Vinmart, Family mart, and B'smart The second distribution channel is key accounts such as schools, hotels, and restaurants These are units that will usually order in large quantities from Vinamilk's branches And the last distribution channel is through distributors and dealers with more than 220,000 stores in 63 provinces in Vietnam (ISAAC 2019) These channels and distributors nationwide have brought Vinamilk’s products to every corner of Vietnam with the same quality Due to the development of e-commerce, Vinamilk also sells its products through online networks such as Shopee, Lazada, Vinamilk website

5.3.1.3 Product differentiation:

Vietnamese people nowadays are concerned about their height and personal health, especially when the rate of underweight and stunting Vietnamese children is considerably high compared to the world (Thanhnien 2018). Fresh milk products are the best solution to supplement calcium and other essential nutrients By producing extensive product lines

creating Vinamilk 100% Organic for high-end customers, Vinamilk has maintained its position

as a leading brand in the diversified fresh milk market (Vinamilk 2020)

Also, Vinamilk is recognized internationally for almost the whole production system, from product quality, production system, to raw supply The company was certified by the British Retail Consortium (BRC) standard for food safety Its production process was controlled strictly according to the Management System of International Standards ISO 50001: 2011 and

HACCP (Nguyen, VCCI 2015) Notably, Vinamilk’s first 5 cow farms are the first and only 5 dairy farms in Southeast Asia to be recognized by Global G.A.P (Vinamilk 2014) These

international certificates probably explain why Vinamilk is such a trusted brand to Vietnamese consumers

5.3.2 Positioning Strategies

5.3.2.1 Map 1: Price and Milligram of calcium in fresh milk

As can be seen from the map, in terms of price, Meadow Fresh has both the highest price (43,5 VND/ 4 cartons) and highest level of calcium (125 mg) while Dutch has the lowest price (29,5 VND/ 4 cartons) compared to other milk brands On the other hand, Vinamilk has quite a reasonable price (31,5 VND/ 4 cartons) which is affordable to most Vietnamese consumers nowadays

Demonstrated in the above positioning map are two attributes ‘calcium content’ and ‘price’ that reflect Vinamilk’s position in the liquid milk market of Vietnam Its calcium content and price are lower than those of foreign brands including Dutch Lady, Meadow Fresh and Table Cove

In fact, Vinamilk’s products are categorized as middle-end This positioning strategy is reasonable considering that Vinamilk’s target is middle-income citizens Foreign brands with higher calcium content yet much higher price are aimed at upper-class consumers However,

as Vietnam is a lower-middle-income country (Foreign Affairs, Trade and Development Canada 2015), Vinamilk boasts more market share in the liquid milk industry in comparison with foreign competitors