Marketing principles individual assignment analyzing marketing environment of vinamilk

TABLE CONTENT 2INTRODUCTION 3 ABOUT VINAMILK COMPANY 3 VISION AND MISSION OF VINAMILK 3 TARGET CUSTOMERS 4 PRODUCT 4 MICROENVIRONMENT 5 THE COMPANY 5 SUPPLIERS 7 MARKETING INTERMEDIARIE

Individual Assignment Hà Mai Ph ươ ng HS153009

quản trị học (2021-2022)

MARKETING PRINCIPLES

INDIVIDUAL ASSIGNMENT

Analyzing marketing environment of

Full name: Hà Mai Phương

Class: HM1602

Student ID: HS153009

Lecturer: Bùi Thị Hạnh Thảo

Course: MKT101 – Marketing principles

Date: Spring2021

TABLE CONTENT 2

INTRODUCTION 3

ABOUT VINAMILK COMPANY 3

VISION AND MISSION OF VINAMILK 3

TARGET CUSTOMERS 4

PRODUCT 4

MICROENVIRONMENT 5

THE COMPANY 5

SUPPLIERS 7

MARKETING INTERMEDIARIES 8

COMPETITORS 8

PUBLICS 10

CUSTOMERS 10

MACROENVIRONMENT 11

DERMOGRAPHIC 11

ECONOMICS 12

NATURAL 13

TECHNOLOGICAL 14

POLITICAL AND SOCIAL 16

CULTURAL 17

HOW VINAMILK CAN REACT TO THE MARKETING ENVIRONMENT 18

REFERENCE 19

ABOUT VINAMILK COMPANY

Vietnam Dairy Products JSC (Vinamilk) is a Vietnam-based food

manufacturer The Company is mainly engaged in manufacturing,

marketing, and distribution of dairy products, especially milk of various forms and other derived products, as well as nutrition food and non-alcoholic beverages It also provides packaging and logistics services, offers other technical supports to cultivation and breeding processes to

farmers, and operates a healthcare polyclinic (Vietnam Dairy Products

Joint Stock Company, 2021) [1]

Vinamilk was established on August 20, 1976 on the basis of three dairy factories from the old regime: Thong Nhat Dairy Factory (formerly known as Foremost factory), Truong Tho Dairy Factory (formerly known

as Cosuvina factory), Dielac Powdered Milk Factory (formerly known as

NestlA factory (Swiss) (Development history Vinamilk, 2021)[2]

VISION AND MISSION OF VINAMILK

Vinamilk said their vision was “to become a world grade brand in food

and beverage industry, where people put all their trust in nutrient and health products.” (About us - Vinamilk, 2021)[3]

Vinamilk’s mission is “to deliver the valuable nutrition to community

with our respect, love and responsibility.” (About us - Vinamilk, 2021)

[3]

Mrs Mai Kieu Lien, Chief executive officer of Vinamilk said: “To

manufacture one of the leading products in the market, we must be always innovative Innovation is a vital element.”(About us - Vinamilk,

2021)[3]

TARGET CUSTOMERS

Although Vinamilk offers a wide product range, from for children to the elder generation, the group of under 14-year-old is considered as the target market for the company At this moment, Vinamilk has a strong position and distribution channels in all the big cities and urban areas However, the brand awareness in the rural areas is relatively weak,

therefore, this is one of the target groups for Vinamilk in the future

(Vinamilk, 2016)[4]

PRODUCT

This assignment will talk about three parts: Microenvironment, Macroenvironment and discuss how companies can react to the marketing environment

Vinamilk have more than 200

products, distributed to 30

countries and 18.000.000

products consume everyday

Vinamilk's brands include:

Vinamilk organic nutrient,

Vinamilk liquid milk, Products

for youth, Vinamilk yogurt,

Powdered milk, Infant cereals

ridielac, Special nutrition

products for adults, Condensed

milk, Beverages, Ice cream,

Cheese, Roasted rice milk,

Soymilk, Ready to drink coffee

(Vinamilk, 2021)[5]

Address at No 10, Tan Trao street, Tan Phu ward, District 7, Ho Chi

Minh city (Vinamilk Contact, 2021)[8]

The leaders of Vietnam Dairy Products JSC (Vinamilk) are Mrs Mai Kieu Lien (Chief Executive Officer), Mr Trinh Quoc Dung (Executive Director – Dairy Development), Mrs Nguyen Thi Thanh Hoa (Executive Director – Supply Chain), Mrs Bui Thi Huong (Executive Director - Human Resources Administration & PR), Mr Nguyen Quoc Khanh (Executive Director – Research and Development), Mr Le Thanh Liem (Executive Director – Finance Cum Chief Accountant), Mr Phan Minh Tien (Executive Director – Marketing), Mr Tran Minh Van (Executive Director – Production), Mr Mai Hoai Anh (Executive Director

International Sales cum Managing Domestic Sales Department) (Our

leadership Vinamilk, 2021) [9]

Vietnam Dairy Products JSC (Vinamilk) has 13 factories and 12 dairy farm

in the North, Central, and South, 1 factory in

Cambodia, 1 factory in

USA (VINAMILK JSC

Corporate Presentation, 2021)[11]

Vinamilk has become one of the leading enterprises in Vietnam in all aspects, greatly contributing to the development of the country and people of Vietnam With these outstanding achievements , the Company

has honorably received the noble titles (Outstanding achievements

Vinamilk, 2021)[10]

(Outstandingachievements Vinamilk, 2021)[10]

In 2019, Vinamilk generated a total revenue of approximately 56.4 trillion Vietnamese dong Vietnam Dairy Products JSC is thelargest dairy company in Vietnam and is among the 10 most valuablebrands in Vietnam ( Statista Research Department , 2020)[12]

SUPPLIERS

Currently, Vinamilk has contracted more than 8,000 farmers with 95,000 cows This dairy processor collects the major share of milk produced in Vietnam and is also a main importer of powdered milk The supply chain

of Vinamilk consists of five activities, namely: input ingredients, raw milk production, processing, distribution and consumption ( Figure 2)

(Luu Thi Thu Huong, 2016) [13]

The source of raw material is one of the important issues of the dairy company but this activity is still the weakest one in the company’s supplychain as it is now facing many difficulties Vinamilk collects raw milk from dairy farms, both from small farmers and from its in-house

industrial farms (Luu Thi Thu Huong, 2016) [13]

By the end of March 2016, Vinamilk was operating 7 cow farms with a combined herd of 15,000 cattle Vinamilk’s cow herd, including the owned farms and that of contracted farmers, now totals over 110,000 head and has the ability to supply nearly 600 tons of raw milk each day With the plan to develop new farms, the company intends to raise the number of cows in their herd as well as from farmers to about 140,000 cows by 2017 and 180,000- 200,000 by 2020 This means that the

planned volume of raw milk in 2020 will be doubled, equivalent to

1,000-1,200 tons per day (Luu Thi Thu Huong, 2016) [13]

MARKETING INTERMEDIARIES

Vinamilk has a strong and nationwide distribution network The

traditional channel of Vinamilk totals 243 exclusive distributors, that cover over 212,000 outlets in all cities and rural areas, which generated about 80% of domestic revenue in 2015 The rest was from the modern trade through direct deals with 1,609 small and big supermarkets, as well

as with 575 convenience stores across the country The strong channel development is partly attributable to its information technology tool ERP which has helped switch the firm from wholesaler to retailer, manage its inventory more precisely and improve its sales teams’ efficiency The firm is now trying to expand its channel to acquire more market share,

especially in rural areas and small urban areas (Luu Thi Thu Huong,

2016) [13]

COMPETITORS

Vinamilk is at the forefront of the powdered milk segment with a market share of 40.6% but has faced many difficulties as smaller competitors

such as Nutifood, Dutch Lady and TH true Milk, VitaDairy launched newproducts Specifically, despite following Vinamilk in the powdered milk segment, thanks to its unique products, combined with the average price

10 - 15% lower than its competitors, NutiFood and VitaDairy are

gradually gaining good market share powdered milk market In addition, international dairy firms such as Abbott, Friesland Campina, Mead

Johnson, Nestle and many other smaller dairy firms have good

competencies in marketing and product research and development

Therefore, these enterprises are always a risk to compete with Vinamilk

(Thị trường sữa Việt cạnh tranh ngày càng khốc liệt, 2020)[14]

In the last 4 years, net revenue of FrieslandCampina Ha Nam has always reached over 3,000 billion dong, net profit is also around 200 billion dongper year In 2019, the net revenue of FrieslandCampina Ha Nam reached 3,141 billion VND, net profit was 111 billion VND, down 4% and 35%

respectively compared to 2018 (Viet Times, 2020) [18]

Currently, NestlA owns 6 factories in Vietnam, providing a range of products mainly in the FMCG industry In addition to Milo or NAN dairy brands, NestlA also provides other items such as confectionery, coffee, icecream, bottled water, By the end of 2019, the total assets of NestlA Vietnam reached 8,281 VND billion, down 6% compared to the

beginning of the year; equity increased 12% to 3,106 billion dong

Updated on October 14, 2020, NestlA Vietnam has a charter capital of

more than 1,260 billion VND.(Viet Times, 2020) [18]

After more than 8 years of product launch, TH Group has introduced to the market more than 70 types of products on the basis of fresh milk TH Group had a spectacular breakthrough in growth According to Nielsen's urban retail market measurement data, in the first 11 months of 2018, TH true MILK grew by nearly 22% in volume and 30% in revenue, in the context of the whole industry like no increase In 2018, TH Group has reached the milestone of more than 7,000 billion VND in revenue

(TheLEADER VN, 2019) [19]

(YouNet Media, 2020)[43]

PUBLICS

Vinamilk created a strategy that would increase engagement and help drive brand awareness among Vietnamese women, especially moms The brand decided to develop compelling, family-oriented video content usingthe “hero, hub, and help” strategy, a new approach for Vietnamese brands

To better engage Vietnamese women online, Vinamilk prioritized

investing and creating timely videos that captured trending pop culture moments To ensure initial lift and visibility, the content piece was

accompanied by a heavy media push using YouTube mastheads and TrueView video ads To keep audiences coming back for more, Vinamilk developed recurring series such as its kids music video series and organic farm series to help retain mom and child interest Vinamilk also producedcontent that provided parenting tips and tutorials — for example, a

cooking tutorial series — to ensure Vinamilk was present when

consumers needed information (How tuning in to audience insights

helped Vietnam’s Vinamilk earn awareness and engagement, 2018)[15]

CUSTOMERS

By breaking up its market based on analysing demographic and

geographic variables, it can be seen that Vinamilk’s goal is to satisfy all customers from kids to elder in any occupation Especially, the group of kids under 14-years-old is considered the target market that Vinamilk wants to come forwards In the present time, Vinamilk’s segment in rural areas and small towns has been weak, thus, this segment will also becomethe target market which Vinamilk want to focus more in the early future

(Vinamilk Marketing Analysis, 2017) [16]

Based on Worldometer elaboration of the latest United Nations data,The

current population of Vietnam (or Viet Nam) is 97,891,614 as of

Thursday, February 18, 2021 Vietnam's population is equivalent to

1.25% of the total world population Vietnam ranks number 15 in the list

of countries (and dependencies) by population (Vietnam Population

Worldometer, 2021) [20] According to the census results in 2019, the urban population is 33,122,548 people, accounting for 34.4% of the total population of the country; rural population is 63,086,436 people,

accounting for 65.6% (Quy mô dân số Việt Nam những phát hiện chính,

2020) [21] At this moment, Vinamilk has a strong position and

distribution channels in all the big cities and urban areas However, the brand awareness in the rural areas is relatively weak, therefore, this is one

of the target groups for Vinamilk in the future (Vinamilk, 2016)[22] As a

populous country with a high population growth rate of 1.2% per year,

the dairy market in Vietnam has always been considered to have great potential Including the period 2010 - 2015, on average, each Vietnamese consumes about 15 liters of milk / year In the coming years, the dairy industry still has great potential as demand is forecast to grow 9% / year, reaching 27-28 liters of milk / person / year by 2020, nearly a half times

higher than the current level (Invest Viet Nam, 2021) [23].

ECONOMIC

The development of Vietnam over the past 30 years is remarkable

Political and economic reforms since 1986 have promoted economic development, rapidly turning Vietnam from one of the poorest countries

in the world into a

low-middle-income country From 2002 to

2018, GDP per capita increased

2.7 times, reaching over $ 2,700

in 2019, with more than 45

million people out of poverty

The poverty rate fell sharply from

over 70% to below 6% (3.2

USD/day at purchasing power

parity) (The World Bank, 2020)

[24] In just six years from 2008

to 2014, a Vietnamese person's monthly

expenditure more than doubled from VND 792,000 to nearly VND 1.9 million

Remarkably, out of spending, Vietnamese people are spending more and more money for food, milk is one of them Of the nearly 1.9 million VND, each Vietnamese can spend up to half on food and drink, a

proportion that has improved significantly compared to 2007 (Invest Viet

Nam, 2021) [25]

(Lao động VN, 2019) [26]

Vietnam is vulnerable to CC It ranks the fifth in climate risk in the

Global Climate Risk Index for 2018 and eighth in the Long-Term Climate

Risk Index (David, Vera and Laura, 2017)[27] Recent manifestations of

CC in Vietnam include extreme weather events that are increasing in number and unusually difficult to forecast Peak monthly rainfall

increased from 270 mm in the period 1901-1930 to 281 mm (1991-2015) while the highest average monthly temperature increased from 27.1°C

(1901-1930) to 27.5°C (1991-2015) (University of East Anglia, 2015)

[28] Having 3,260 km of coast line11, rising sea levels definitely create a big impact on Vietnam According to the Intergovernmental Panel on CC (IPCC), if sea levels rise by 100cm, the potential land loss for Vietnam would be 40,000 km , account for 12.1% total area and 17.1 million 2

people will be exposed, accounting for 23.1% of population at the time

of report (Vietnam's Government Portal, 2021)[29]

From 2018 to 2019, the PM2.5 dust concentration tends to increase more than the period from 2010 to 2017 In the period from September to December 2019, the Northern region had a number of episodes air

pollution peak Air quality indexes in some cities such as Hanoi and Ho Chi Minh City have many times of bad with AQI index from 150 to 200,

sometimes exceeding 200, equivalent to a very bad level (Ministry of

Natural Resources and Environment, 2020)[30]

In a joint effort to combat climate change and environmental pollution, over the past nine years, the 1 million trees fund program for Vietnam andVinamilk have persistently planted hundreds of thousands of trees in many localities across the country In 2020, the 1 million green trees fundfor Vietnam will mark a 9-year milestone that the 1 million green trees fund for Vietnam has gone and brought greenness throughout the country.During the 9-year journey, the Fund went through 41 locations in 18 provinces and cities nationwide Up to now, the Fund of 1 million trees for Vietnam has planted 851,000 trees of all kinds with a total value of about 11 billion VND Green shields are formed and are contributing to overcoming and limiting saline intrusion, drought, desertification due

to climate change, to protect the environment and people's lives (Báo Tài

nguyên & Môi trường, 2020)[31]