Branding strategy of Dutch lady in Vietnam

Besides, the Vietnamese dairy market is quite competitive with many different rivals both of local and global; hence, based on the current market share and performance of Dutch Lady Viet

STATEMENT OF AUTHORSHIP

FINAL PROJECT NAME BRANDING STRATEGY OF DUTCH LADY IN VIETNAM

STUDENT NAME

PHAM NGOC HIEN

PHAM XUAN VINH

Declaration and Statement of Authorship

1 We hold a photocopy of this final project which can be produced if the original is lost or damaged

2 This final project is our origin work and no part of it has been copied from any other student’s work or from any other source except where due acknowledgement

is made

3 We have not previously submitted this work for any other course/ unit

4 We give permission for our work to be scanned for electronic checking of plagiarism

5 We give permission for a copy of our marked work to be retained by the Department for review by external examiners

We are also very grateful to Solvay - ULB Vietnam, Education management Admin for giving us the full information and feedback during the course

Next, our thankfulness goes to our boss, our colleagues and our friends who support and give us valuable ideas and insights

The last but not least, we would like to express our love and our appreciation to our family who are always beside and support us in term of spirit as well as material

Thanks to this final project, we not only achieve the applied Marketing knowledge, but also get more overview the dairy market and how to build the brand in dairy field as well

Ho Chi Minh, March, 2013

Pham Ngoc Hien & Pham Xuan Vinh

LIST OF ABBREVIATION

BUMO - Brand used most often

CAGR - Compound Annual Growth Rate DDP - Dairy Development Program

DKY - Drinking yogurt milk

DL - Dutch Lady Vietnam

FCV - FrieslandCampina Vietnam

FMCG - Fast moving consumer goods

IFT - Intermittent feeding trajectory

P4Ws - Purchase for 4 Weeks

RTB - Reason to believe

SCM - Sweetened condensed milk

TOM - Top of mind

TOM ad - Top of mind advertisement

LIST OF FIGURES

Figure 1: Average income of Vietnamese in 5 main cities 4

Figure 2: Contribution of the Dairy Market 6

Figure 3: Drinking Usage Panel 7

Figure 4: Annual Growth rate of Dutch Lady 8

Figure 5: Dutch Lady UHT sales contribution by region 8

Figure 6: Segmentation mapping 10

Figure 7: Monthly TOM brand awareness liquid milk 12

Figure 8: Monthly TOM Ad awareness liquid milk 13

Figure 9: Brand consumed P4Ws liquid milk 13

Figure 10: Dutch Lady Brand image 14

Figure 11: Brand Character and Image of Vinamilk 16

Figure 12: The growth of categories drinking 22

Figure 13: Factors to affect consumer to purchase a FMCG product 23

Figure 14: The evaluation of environment concerned when purchase a FMCG product 24

Figure 15: The evaluation of charity concerned when purchase a FMCG product 25

Figure 16: Ansoff's Matrix 26

Figure 17: Porter Generic Strategy 1985 28

Figure 18: Happy Cow Milk mapping 31

Figure 19: Pricing Strategy 32

Figure 20: Three level of product 34

Figure 21: The Dairy Market Volume and Value 50

Figure 22: The Market Share of Dairy Market in Value and Volume 51

Figure 23: The evaluation of food safety when decide to buy 52

Figure 24: The react of consumer if product manufacturing negatively affects the environment 52

Figure 25: Maslow Hierarchy 1943 53

Figure 26: Media strategy Model 53

LIST OF TABLES

Table 1: Vietnam Long-term Macroeconomic Forecasts 4

Table 2: Selected Asian Economies: Real GDP and Consumer Prices 5

Table 3: Market share of Dutch Lady and Vinamilk in Value and Volume 15

Table 4: The drinking habit by age 20

Table 5: The drinking habit by region 21

Table 6: The drinking habit by income 21

Table 7: Population by Sex and by Age group in 2011 54

LIST OF PICTURES

Picture 1: 15 Years of Dutch Lady in Vietnam 2

Picture 2: Product Portfolio 3

Picture 3: Some communication materials of Vinamilk 15

Picture 4: The TV Commercial of Vinamilk 17

Picture 5: The Print advertisement of Vinamilk 18

Picture 6: Out of Home advertisement of Vinamilk 19

Picture 7: Brand activation of Vinamilk 19

Picture 8: The American Humane Certificate 29

Picture 9: The Design of Happy Cow Milk bottle 35

Picture 10: Illustration of Happy Farm online game 45

LIMITATION

Dutch Lady is well-known brand in the world which has a wide-range of data and researches in many different analysis, therefore, in our report, deal to the scope of work, we would like to discuss the case of Dutch Lady’s communication in Vietnam only.We also want to analyse the branding strategy of Dutch Lady in our point of view instead the whole marketing activities

Besides, the Vietnamese dairy market is quite competitive with many different rivals both

of local and global; hence, based on the current market share and performance of Dutch Lady Vietnam, we have just picked out Vinamilk as our key competitor to analysis and skip for the other rivals

Furthermore, after analysis on the current performance of Dutch Lady, we have found some findings and given the feasible recommendations There are two strategies that DL can apply for short-term and long-term development Each of strategy would be used for each different branding plan for DL Due to the limitation of this project, we would focus only on building a branding plan for launching the “Happy Cow Milk” concept

Moreover, in order to make this report more visual and attractive, the using images, pictures, and photos has been collected from the Internet and usage for illustration purpose only

Finally, this report has been written in English which is not the primary language of the team researchers Therefore, sometimes, the readers could be found some parts, and sentences which are difficult to understand and not clear about the point of view, please notice to us for further improvement It would be our pleasure to make it clear and update it for later

TABLE OF CONTENT

EXECUTIVE SUMMARY 1

1 INTRODUCTION 2

1.1 Overview about Dutch Lady Vietnam 2

1.1.1 Background of Dutch Lady Vietnam 2

1.1.2 Product portfolio 2

1.2.2 The current Dairy Market 6

1.3 Findings 9

2 DUTCH LADY AND 3C ANALYSIS 9

2.1 Company 10

2.1.1 Segmentation and target consumers 10

2.1.2 Dutch Lady current performance 12

2.1.2.1 Branding performance 12

2.1.2.2 Findings 14

2.2 Competitors analysis 14

2.2.1 Current performance of Vinamilk 14

2.2.2 Brand performance Vinamilk 15

2.2.2.1 Brand Characteristics 15

2.2.2.2 Branding Strategy 16

2.3 Consumers insight 20

2.3.1 How the customer consume Dairy product 20

2.3.2 Vietnamese Perception trend 22

2.3.2.1 Being Cleaner and Greener 22

2.3.2.2 Being responsible 24

3 RECOMMENDATIONS 26

3.1 Happy Cow Milk concept 28

3.2 Targeting customers 29

3.3 Positioning 31

3.4 Pricing strategy 32

3.5 Product description 33

3.5.1 Core benefits 33

3.5.2 Actual product 33

3.5.3 Augmented product 34

3.6 Packaging 34

3.7 Communication 35

3.7.1 Tone of voice 35

3.7.2 Communication plan for 2 years 37

3.7.2.1 Pre-launch Stage 37

3.7.2.2 Launch Stage 39

3.7.2.3 New product line extension launching 47

4 REFRENCE LIST 49

5 APPENDIX 50

5.1 Appendix 1: List of figures 50

5.2 Appendix 2: List of tables 54

EXECUTIVE SUMMARY

Dutch Lady has emerged as one of the first global corporation to invest in Vietnam in the very beginning of the Opened Economic Aiming to set up a strong basement in Vietnam, Dutch Lady Vietnam has put great effort during 16 years to provide not only the good quality of dairy products but also improve the physical body of the Vietnamese The success of Dutch Lady roots from localizing their products and bringing it closely to Vietnam consumer

In this report, team researchers want to find out about the current branding strategy of Dutch Lady in Vietnam and how it communicate to the Vietnamese consumers This report will comprise in 3 parts which is assigned to bring the clear point of view about Dutch Lady, its key competitors, and feasible branding strategy in the next 2 years

In the first part, it would provide to the reader about the overview of the Vietnamese diary market It also discusses about how potentiality of the liquid milk market and some macro-economy factor driven this market in the next 3 years

The second part would examine the current performance of Dutch Lady on the 3C model: Company, Competition and Customer The Company analysis discusses about the segmentation and target customer of Dutch Lady, differently, the segmentation of liquid milk is based-on the psychology of consumer and their milk consumed behaviour Besides,

it also examine on the current branding performance of Dutch Lady Furthermore, in order

to understand clearly about key rivals, the competitor will examine on the branding performance of Vinamilk which is a key competitive rival Then, of course, the customer insights is the key which lead to the success of ay branding campaign, therefore, the team researcher also want to find out how consumers purchase Dairy product and their perception trend

Based-on the below analysis, part three would like to point-out the feasible branding strategy to Dutch Lady in order to achieve the main objectives for both of short-term and long-term development: to keep and improve the current position of Dutch Lady in Vietnamese Dairy market and to explore a new market Due to the limitation of this project, the team researchers would only propose the communication plan for Dutch Lady

to explore a new market through 3 stages: pre-launch, launch, and post-launch

1 INTRODUCTION

1.1 Overview about Dutch Lady Vietnam

1.1.1 Background of Dutch Lady Vietnam

FrieslandCampina Vietnam is a joint-stock company which established in 1995 between Binh Duong Im-Export Company (Protrade) and Royal FrieslandCampina - the leading company of dairy products in Netherlands with 135 global experiences

From Grass to Glass

From its start in 1995, Dairy Development Program (DDP) has been run to improve farm productivity and produce high quality milk With the dairy management method “from grass to glass” to ensure product’s quality and hygienic conditions, purchase milk directly from farmers and pay higher for better quality Annually, the company has invested US$1 million in the program in training, technology transfer for farmers, the establishment of a complete controlling system, and encouraging investment in using bio gas system among

others Hence, DDP is a full system to control the quality of milk from grass to glass well

FrieslandCampina Vietnam can supply the market with over 1.5 billion units of milk every year, offering Vietnamese consumers a wide range of quality dairy products and daily nutrition under brand names Dutch Lady, Friso, Fristi and YoMost

Community toward

Besides the business development

mission, the company has also committed

to develop the community in Vietnam

That is to help local dairy farmers to

achieve sustainable dairy farming, offer

consumers a broad range of milk-based

beverages and child nutrition to improve the

nutritional quality and enhance the

nutritional awareness to improve health and stature of Vietnamese people, and raise education quality in Vietnam with a study encouragement fund through the Den Dom Dom

Study Encouragement Fund, which carries a message saying “Sharing is Happiness”

yoghurt drinks to sweetened condensed milk It can fulfil all of the dairy need for the entire family

 Dutch Lady Brand used

for powdered milk and

UHT milk Powdered milk

focus on kids of 1-6 years

old and for mum in

pregnancy UHT focus on

kids of 5-11 years old only

It provides nutrition for

kids to be taller, stronger

and smarter

 Friso is powdered milk for

kids from 1-6 years old and

for mum in pregnancy, Friso

has been positioned as premium lines

 Yomost is yogurt drink which is focus on young target from 16 to 24 years old They

concern about beauty in skin and good for digestive tract Hence they demand to drink Yomost to be stronger and more beautiful

 Fristi with funny image attracts kids from 5-11 years old as yoghurt drink to kids

 Ovaltine which is imported directly in Thailand with powdered milk and drinking milk for 7-12 year old kids

1.2 Overview about the Vietnam Dairy Market

1.2.1 The forecast of Macro-factors in Vietnam from 2013f to 2015f

Recently, Vietnam has emergence as one of the most promising and potential market in Asia with a large and young population which have a steadily growth around 1.18% per annum For instance, the population of Vietnam can reach to 94.2 million in 2014f, 95.47%

in 2015f and 96.47 in 2015f Furthermore, Vietnam also have very young and dynamic age structure which has more than 56% of the total population are under 30 years old (Table 08) In a marketer point of view the younger of the age structure, the higher of their

Picture 2: Product Portfolio

expenditure Moreover, the forecasted Real GDP during the year 2013f to 2015f also has increased approximately 1.3 times (Table 2) comparing with 2012f and kept stable at 8.0%.The increasing of GDP leads to the increase of Vietnamese annual income which would reach to 1.976$ per capital in 2013f and jump to 2.597$ per capita in 2015f

Table 1: Vietnam Long-term Macroeconomic Forecasts

(Source: Business Monitor International 2011)

To illustrate that according to AC Nielsen research in five main cities of Vietnam: Hanoi, Saigon, Da Nang, Can Tho, Hai Phong, there is a dramatically increase of the group of people who has income 4-7 million per month Moreover, by 2006, the proportion of people with income higher than 10 million per month has seized a big proportion and still going up These proven data could point out a trend of an increasing of a high class people

Figure 1: Average income of Vietnamese in 5 main cities

(Source: AC Nielsen Database 2009)

To support for this point, according to the IMF report and forecast, for the period from

2011 to 2013f, there is a trend of decreasing the CPI by more 12%, it started with a high CPI in the beginning of 2011, then it goes down dramatically 8.1% which is nearly 2 times

in 2012f, and steadily declined to 6.2 in 2013f Therefore, it is foreseeable to believe about the trend of recession in CPI for the years 2013f to 2015f, which could be a motivation for

Vietnamese people to consume more after a while of time for saving According to Kotler (2005), when humans’ living standard improves steadily, customer purchasing power and spending patterns in term of income distribution and change in income are affected strongly by economic issue In the other words that, with the increase of Vietnamese economy and living standard, which would lead to the increase of purchasing power in the next 3 years

It can be realised that Vietnam has did really successfully on its recovery after the big regression in 2008 Although, the inflation could be one of the key invulnerable risks for the Vietnamese consumption and the economy, it is forecasted at an affordable rate around 4.8% from 2013f to 2015f Comparing with the beginning of the regression in 2008, there was a time the inflation rate has reach to 18.1% which made people really concern on saving and stop buying things

To sum up, with its potentialities of high population, increasing of disposal income, the decline of Consumer price, it would be expected a bright future for increasing Vietnamese consumption and household expenditure for the next period 2013f to 2015f In the case of Dutch Lady Vietnam, with these potential Marco-indicators, it is able to believe about the increase of sale during this period

Table 2: Selected Asian Economies: Real GDP and Consumer Prices

(Source: IMF, 2011)

1.2.2 The current Dairy Market

On overall, the dairy market has proven its potentiality and stability with its stable growth during seven years from 2005 to 2011 and still be forecasted to increase for the next 3 years The Dairy market has expanded with the CAGR at 9.7% in Volume and 16% in Value from 2005 to 2015f For instance, it is expected to reach 52.8 thousand billion VND

in 2015f (Figure 21) To zoom in the dairy market, the liquid milk has becoming the big driver of the dairy market both of volume and value shares years after years Started at nearly one-third of the dairy market around 27.6%, the liquid milk soon dominates the market with more 37.3% in 2012 and expected stable growing for the next 3 years 38.4% in 2013f, 39.6% in 2014f and 40.8% 2015f The increase of Liquid milk share has taken from the SCM which is repositioning for the low income family It is a shift in the Vietnamese consumer behaviour, which is a proven of the changing in their perception and the increase

of middle class in the society

Figure 2: Contribution of the Dairy Market

(Source: Internal Data)

To illustrate, according to a research of Kantar Worldpanel about the consumption of liquid milk among the dairy market in 2010 and 2011, the proportion of liquid milk consumers is increasing steadily especially the group of kids (4-13 years old) has the highest proportion

of increasing by 6% It is an evident to believe about the changing of Vietnamese perception about drinking liquid milk These changing could be the result of the increasing

of Vietnamese intellectual to integrate with the whole world after the war time People are more educated to realise the benefits of drinking liquid milk in the daily activities Moreover, their disposal income has increase steadily which make them do not consider too much on buying liquid milk and storage at home to drink

Figure 3: Drinking Usage Panel

(Source: Kantar Worldpanel Vietnam 2011)

To look deeply in the liquid market, the market is highly competitive with two main market drivers: Vinamilk (VNM) and FrieslandCampina Vietnam (FVC) which are seized more than 65% of the whole market VNM is still the market leader, and FVC is closing the gap Therefore, in the content of this report, VNM has been chosen at the key competitors of FVC in the liquid milk market

On the general, DL has a positive growth of the liquid milk from 2010 to 2011; however, its growth is quite low comparing with the Average Growth of the whole Liquid milk market (UTH milk) For instance, in 2011, DL grow +9% while the whole market is +18% The gap between DL and the liquid market is quite big which could be the reason for falling behind the competition of VNM

Figure 4: Annual Growth rate of Dutch Lady

(Source: Business warehouse and internal market table Jul 2010)

Figure 5: Dutch Lady UHT sales contribution by region

(Source: Internal Data)

To look more deeply in the sale performance of DL, North is still the biggest but lost 1% share YTD 2011; it would be a consideration with the penetration of VNM in Hanoi Mekong as the 2nd and East as the 3rd gained 1% share at the expense of Central and HCM.HCM is one of the key cities in Vietnam, but its contribution was not appropriate with its potentiality, therefore, it needs more investment on HCM to expand the market

A 2009 Growth

'09 vs '08 A 2010

Growth '10 vs '09 A 2011

Growth '11 vs '10 Total UHT categories ('000 litre) 326,000 116% 384,000 118% 454,000 118% Total DL UHT ('000 litre) 125,558 120% 142,264 113% 154,796 109% Pack 180ml ('000 ctns) 10,219 117% 10,874 106% 11,944 110% Pack 110ml ('000 ctns) 7,011 138% 8,445 120% 9,124 108% Pack 1litre ('000 ctns) 20 100% 311 285 92%

• Vietnam is continuously proved as a very potential market with young population (below 30 years olds which is accounted 56% of the total population)

• Potentiality for mainstream products with middle income people (4.5 – 7.5 mil/month) occupying a major part (58%) of the population

• Huge opportunity to grow further in the North region as it is the biggest population contribution with 40%, followed by Mekong Delta with 20%

• The current liquid market in Vietnam has a high potential with the growth of +18% in

2011, however, it is not appropriate with the growth of DL liquid milk, which was around 9% in 2011

2 DUTCH LADY AND 3C ANALYSIS

The 3C's Model is a business model, which offers a strategic look at the factors needed for success It was developed by Kenichi Ohmae, a business and corporate strategist The 3C’s model points out that a strategist should focus on three key factors for success In the construction of a business strategy, triangle must be taken into account: the Customer, the Competition and the Corporation (3’C) (Ohmae 2005) Only by integrating these three in a strategic triangle, a sustained competitive advantage can exist Ohmae refers to these key factors as the three C’s or strategic triangle It becomes important to understand that there are certain needs that arise from the customer end They include core benefit or service and expected product Recognizing this need the corporation or company offers a basic product

To cater to their expectations and also to differentiate from competitors who tend to morph their products, corporations offer augmented products Also, both the corporation and the competitors eventually tap the existence of potential product

2.1 Company

2.1.1 Segmentation and target consumers

The segmentation of liquid milk market in Vietnam can be divided by four main target groups: performers, body shapers, naturalists, and functionalists They are driven by two main factors: health concerned, individualistic vs sociable (social behaviour or social identity) The segmentation has been defined based on their psychology and behaviour when consumes liquid milk

Figure 6: Segmentation mapping

defined as people who

are less concerned on

Health and tend to be

more individualistic

They consume liquid

milk because of its

basic function such as

convenience, supply

the energy for body,

and thirsty Most of

them are quite busy

Performers extremely focus on health- concerned and tend to be sociable

They have a better financial condition to choose milk which they believe that is the best for themselves, their family, and children

They have mid-high income

The Body shapers are at the middle between Functionalists and performance about the health-

They are extremely individualistic and quite concerned on health care Highly appreciate natural

ingredients They are middle- high income people

with their work and

need to provide energy

to continue doing their

job until have time for

well-how the other talk about their body

They have high income

mid-High education and

 Long run energy

 (Mum) Key for optimal child development (height/intelligence)

 (Mum) To bring the best to my Children

 (Adult/Teen) Milk is regenerating/ good for my development

 Milk has all that one needs for physical and mental achievement

 Full of calcium and minerals, good for the bones, muscles and shape

 Can be used as

a meal substitute

 Good for the skin

 I don’t feel heavy/ feeling light and fresh

 Has all the good things

 As a meal

substitutes at times

 When tired

 To

thirst

refresh/quench- When the feel tired, anytime they need

an energy re-boost (after intensive activity, after coming back from school)

 In the middle of the afternoon to make a break and to relax

 When on the go all day and need something to have at hand at office

 Is an essential part of my beauty regime because it is a natural beauty enhance

 I drink it before and after sport

 On the morning, as part of my daily routine

 Makes me feel like I am doing the right thing for myself and

 As a part of

my daily dose of nutrient

 Whenever I feel over- stressed

 Whenever I feel over- heated

 VNM: accessible,

friendly, relax, easy going

 DL: safe, foreign, specialist, premium

 VNM: less quality, more modernity, more variety

 DL: quality, premium, reliable

 VNM:

appealing for 100%

freshness and modernity

 DL: premium brand with good milk from Holland

 VNM: natural, 100% fresh milk

Based on the segmentation of the liquid milk consumers, DL has chosen the Performers Group as its targeted consumers DL has seen its brand characteristic can meet with the Performers Group characteristic

2.1.2 Dutch Lady current performance

2.1.2.1 Branding performance

DL has a really good branding strategy for the liquid milk market The TOM of DL always stay at the first position comparing with its competitor such as the VNM For instance, when asking a consumer about which brand of liquid milk that they know, there are 56.3%

of the responses (in Feb 2011) will recall the brand Dutch Lady.

Figure 7: Monthly TOM brand awareness liquid milk

(Source: Internal Data)

On the contrast, although DL has the highest TOM brand awareness of liquid milk, it still falls behind VNM in the TOM Advertisement awareness in the liquid milk market

On the normal condition, when DL has a high TOM of brand awareness, it is possible to have a high TOM of the other measurements, because the brand awareness is the integrated

of the whole branding strategy and tools However, in the case of DL, it has highest brand awareness but has lowered on the advertisement awareness To illustrate, the chart bellowed has showed the performance of DL advertisement in the market

Figure 8: Monthly TOM Ad awareness liquid milk

(Source: Internal Data) Moreover, the P4Ws rate of DL can be seen at first position, comparing with the other competitors For some period that VNM has reached more higher than DL However, on general, DL has really good loyalty consumers, who are only trust in the value of DL brand It is indicated by the chart bellow

Figure 9: Brand consumed P4Ws liquid milk

(Source: Internal Data) Furthermore, based on the internal data, the brand equity of DL has been closely with its brand image There are more than 54% of consumers perceived DL as a brand, which helps

to enhance the children physical and mental improvement

Figure 10: Dutch Lady Brand image

• Moreover, it seems the current advertising campaign of DL does not effective enough comparing with its own rivals

2.2 Competitors analysis

2.2.1 Current performance of Vinamilk

VNM is the 1st key competitor, very strong on nationwide, it has develop the “fresh milk” concept Over the past two years, VNM has become more aggressive and professional in their marketing approach Moc Chau and Bavi would be also the key competitor, which has seized large proportion in the North And a new emerging competitor, True Milk (TH) which already shout out loud about the huge investment in fresh milk segment However,

on general, the sales of DL and VNM have accounted almost the liquid milk market in the term of market shares and sale In 2011, VNM has reached 39.27% in Value and 41.34% in

Volume, while DL has gained 28.56% in Value and 24.59% in Volume These two players have dominated the liquid milk market with approximately 67.83% in value Therefore, this report will pick out VNM as the key rival to compete

Table 3: Market share of Dutch Lady and Vinamilk in Value and Volume

(Source: Internal Data) 2.2.2 Brand performance Vinamilk

2.2.2.1 Brand Characteristics

VNM has targeted the same customers of DL, however, the way VNM approach is quite different The branding strategy of VNM has tended to touch the target group by emotional approach VNM has generated the human characteristic through its brand These characteristics signify brand behaviour through its tones of voice and also the way to communicate to the target customers VNM’s character has been defined as being beautiful, friendly, active, healthy and social These characteristic has been expressed in its colour using, image, and music

Picture 3: Some communication materials of Vinamilk

Through the communication material, it can realise the clearly its brand characteristics VNM used the natural photo with the green colour; it would create the relaxation feelings

to the audience and it can recall the origin of product is from nature The audience can feel friendly, healthy, and beautiful when they see these materials The Brand image is the current view of the customers about a brand It can be defined as a unique bundle of

associations within the minds of target customers It signifies what the brand presently stands for It is a set of beliefs held about a specific brand

VNM has expressed with full of energetic, diversified image of 100% fresh milk and the closely approach with funny cow dancing That leads to the differentiation of character and image compared with Dutch Lady

Figure 11: Brand Character and Image of Vinamilk

(Source: internal Data)

2.2.2.2 Branding Strategy

In April, 2007 VNM had first launched fresh milk with heavy communication supports From Jul 2008 to May 2012, VNM built brand awareness strongly through the WOW channel big promotion and relaunch fresh platform As these activities, they got more attractive by new image for fresh milk In 2011, VNM fresh 100% pasteurized is one of a big evolution for health- oriented consumer In Feb, 2011 keeping the momentum of fresh milk, VNM ADM+ milk has been launched with funny cow After these revolutions, VNM always could be confident in no 1 of dairy market with fresh milk, and nutrition

a TVC communication

The TVC communication has been used to transfer the concept of “Fresh milk” to the audience The concept is saying that “Fresh milk is good but not enough”, it is also demand more added nutrients

• Marketing objective: to recruit consumers who want to have fresh milk with added nutrients and get a trial from them with new concept

• Target Audience: kids from 4-12 years old and moms from 25-40 years old

• Benefit: The VNM fresh milk has supplement the formula ADM+ fortified with micro nutrients

• RTB: Nutrition from ADM+ that could improve eyesight and height

• Key Copy Words: New VNM ADM+ brighten your eyesight and enable to reach up

• Story board: Frame 1& 2: show a kid & a cow playing basket ball Frame 2: they are reading books Frame 3, 4, 5: A kid and a cow like as close friend After a while to hang out with the cow, the kid has improved height and eyesight by drinking ADM+ VNM All frames look so funny and exciting that makes the audience enjoyable and happy to make the purchasing decision

Through this TVC, the communication of VNM to customer is very easy to perceive the concept, feeling pleasure and friendly

Picture 4: The TV Commercial of Vinamilk

• Air schedule: Air on VTV3, VTV1, HTV7, HTV9, Da Nang VTV, DNTV…in nationwide

b Print Advertising and PR

Besides, the TV channel, print advertising is one of tools to transfer the image and layout into print advertising in order to support for the key concept

On the advertisement, the funny cow is also has been used as symbol of VNM UHT The funny cow is the closed friend of the kid and helps him to improve the height and eyesight

• Marketing Objective: to recruit consumers who want to have fresh milk with added nutrients , to create awareness of new claim and get a trial from them

• Consumer insight: Fresh milk is good but not enough

• Target Audience: moms from 25 – 40 years old They could be officers, housewives…

• Benefit: Formula ADM+ fortified with micro nutrients

• RTB: Nutrition from ADM+ that could improve eyesight and height

• Key Copy Words: New VNM ADM+ brighten your eyesight and enable reach up

• Insertion schedule on popular press such as Tuoi tre, Thanh Nien newspaper, magazines as Tiep thi gia dinh, The gioi van hoa, Me va be

Picture 5: The Print advertisement of Vinamilk

c Outdoor Advertising

Out of home advertising is focused on approach to consumers when they are "on the go" in public places, in transit, waiting (such as in a medical office), and/or in specific commercial locations (such as in a retail venue)

 Marketing objective: to introduce new claim of new product and to build up the brand

awareness

 Location on: focus on the crowded street, corner, cross road, wet market to catch attention Some street has been used Nguyen Thi Minh Khai vs Cach Mang Thang Tam, Dinh Tien Hoang, Vo Thi Sau, Tan Dinh Market

Picture 6: Out of Home advertisement of Vinamilk

d Activation at primary school and photo contest

Marketing object: to create awareness and make an engage with target customer

Games: Through basket game and photo contest, VNM want to build and remind customer about funny cow image and also communicate message in “brighten your eyesight and enable reach up”

 Using mascot as funny cow to make closely with children They could take a photo with mascot, chatting together Funny cow mascot as a symbol of ADM+

 Basket ball: is one of the popular sports in primary school It helps kids improve in physical development

 Puzzle game: helps kids improve in mental development It makes them curious and try

to get an answer early That is also a competition among other one

The chain of activation of VNM could be transferred the key message of ADM+ VNM

“Brighten your eyesight and enable reach up” It helps kids get a perfect development

Picture 7: Brand activation of Vinamilk

2.3 Consumers insight

2.3.1 How the customer consume Dairy product

Milk and dairy products contain many nutrients and provide a quick and easy way of supplying these nutrients In market, we have many kinds of dairy products such as milk powder, liquid milk, DKY, SCM, soya milk and tonic food drink Each kinds has an own target from 4 to 50 years old and divided by channel, by each income

By Age Group: In total categories, liquid milk and soya milk are preferred by many target

customers

 70-80% kid 4-12 prefer to drink liquid milk once a week, while this rate among teen and adult are 40%, 25% respectively

 Over 40% soya milk is used by 4 -50 years old

 20% kid 4-12 drink DKY, while just around 8-10% teen and young adult drink DKY

That means, the habits for drinking liquid milk by age is early from 4-12 years old The causes of this could be the development of living standard The parents now have better condition to take care their children and of course they has realised the important and benefits of drinking milk for their kids to develop physical and metal as well

Table 4: The drinking habit by age

(Source: Internal Data)

By Region: Focus on most big cities as HCM, Ha Noi, Can Tho

 41.3% Hanoian drink liquid milk, while Saigonese and Danang just get 35% penetration

 Noticeably Soya milk penetrates in all regions competitively with liquid milk, while DKY following far behind the liquid milk and soya milk

 The difference in drinking habit by region, especially in Ha Noi may be due to the high education and the realization of the importance and benefits in drinking milk

Table 5: The drinking habit by region

(Source: Internal Data)

By Income: Most focus on mid and high income in tracking

 In liquid milk: 40% of high income person drink liquid milk, while middle income is 35.8% and 28.2% in low income

 However Soya milk is preferred by middle income (45.6%) and high income (44%)

 Most of drinking liquid milk users has high income They are able to pay for milk in daily times

Table 6: The drinking habit by income

(Source: Internal Data)

Switching to liquid milk

Milk Powder is on decreasing trend in terms of share of throat while Liquid milk is taking the opposite trend There is 9% volume growth of liquid milk comes from IFT mainstream

Figure 12: The growth of categories drinking

(Source: Internal Data)

To sum up, the consumption of liquid milk is highest at the age of 4-6 years old; it can indicate that the parents buy liquid milk a lot for their children consumption among this age Hence, DL can choose the kids from 4-6 years old as the touch points to approach their parents in order to make purchasing decision Besides, DL could focus on the Hanoi and Saigon which is the reason with high consumption of liquid milk and have a better living standard

2.3.2 Vietnamese Perception trend

2.3.2.1 Being Cleaner and Greener

Being Cleaner

Recently, deal to the increase rapidly of the population in the main cities of Vietnam, the level of hygiene is going down in common, especially in food and beverage industry Vietnamese consumers demand the high level of hygiene of food that they are ready to pay more to get the fresher and hygiene food

According to a recent research of FTA in 4 main cities of Vietnam, it has pointed out the key factors that consumer consider to buy a FMCG Product is food safety while the following factor is reasonable price It is quite surprising; because normally, the consumers tend to do more care about the pricing factors on making the decision It has indicated that