Building Dumex Mama golds brand communication strategy for the next 3 years (2013 đến 2013)

Therefore, milk and other dairy products become common in the Vietnamese life, if before 90s we had only one or two companies produce and distribute milk, mostly is powder milk and conde

MAI TRUNG TANH

Ho Chi Minh City (2013)

MAI TRUNG TANH

Tutor’s Name: ALAIN VAN DEN EYNDE

Ho Chi Minh City (2013)

ACKNOWLEDGEMENTS

First and foremost, we would like to express deeply gratitude to our major

professor, Prof ALAIN VAN DEN EYNDE, who provided us valuable guidance,

comments and also approval on this thesis

We also would like to express appreciation to Mr Serge Bywalski for his initial

advices and guideline of structure of the thesis

We sincerely thank to the Marketing department of Danone Vietnam for their

support information, encouragement on this paper

Lastly, we would like to give a special thank to our family, our friends, our

colleagues, and staffs of the post graduated Department of the Ho Chi Minh Open

University, who give us helps, supports to fulfill this project

March, 2013

Mai Trung Tanh

Vu Ngoc Yen

PREFACE

In Vietnam, milk industry is one of industries that still having large potential In that industry, the products are not only for children but also for elder Pregnancy women are one of key customer that needs milk during pregnancy period

Dumex Mama is the brand focus on the above segment Although much investment in Vietnam for marketing and developing market, the sales volume result is still far from the main competitors On the other hand, brand awareness is also low

This is the reason why we write the thesis “Building Dumex Mama Bold’s brand communication strategy for the next 3 years (2013-2015)” in order to gain more awareness and relevant result

Communication strategy is developed base on Vietnam milk market analysis and current activities of Dumex Mama

BUILDING DUMEX MAMA GOLD’S BRAND COMMUNICATION

STRATERGY FOR THE NEXT 3 YEARS (2013-2015)

Vu Ngoc Yen and Mai Trung Tanh wrote this case under the supervision of tutor’s Serge

Bywalski and Alain Van Den Eynde to provide the material for final project of the Master class

The authors do not intend to illustrate either effective or ineffective handling of a managerial

situation The authors may have disguised certain names and other identifying information to

protect confidentiality

Our school prohibits any form of reproduction, storage, or transmittal without its written

permission To order copies or request permission to reproduce materials, contact with the

author

Copyright © 2013 by Vu Ngoc Yen and Mai Trung Tanh

“The objective was as simple as it was ambitious: to build a food company which could

rival with the greatest multinationals by bringing together Danone’s products and brand and the

industrial know-how and financial strength of BSN The creation of BSN GERVAIS DANONE

was the consecration of my life’s work Antoine became President of the new company while

Jacques Corbière (who up to that point had been President of Gervais) and I became

Vice-Presidents Thirty years after the fusion, I can safely say that all my wishes have been fulfilled

Not only has Danone managed to become an international brand but its formidable growth has

been achieved without sacrificing the human and professional values which, since its very

creation, have been at the heart of our group’s identity.”

From a conversation with Daniel Carasso, recorded in 2003.

TABLE OF CONTENT

LIST OF SYMBOLS AND ABBREVIATIONS v

LIST OF FIGURES v

LIST OF TABLES vi

LIST OF PICTURES vi

CHAPTER 1: DISCRIPTION OF THE CASE 1

1.1 About Vietnam milk industry 1

1.2 About Danone Dumex 2

1.2.1 Overview 2

1.2.2 Product line 2

1.3 About competitor 5

1.4 Objective of the thesis 7

CHAPTER 2: ANALYSIS THE CASE 8

2.1 SWOT analysis 8

2.2 Competitor Analysis 11

CHAPTER 3: COMMUNICATION PLAN 16

3.1 Target customers 16

3.2 Customers insight: 17

3.3 Objectives 17

3.4 Communication Strategy 18

3.5 Timing, budget and evaluation 26

REFERENCES 30

LIST OF SYMBOLS AND ABBREVIATIONS

FY: Financial Year

IMC: Integrated Marketing Communications

OTS: Opportunity To See

ROI: Return On Investment

SEO: Search Engine Optimizer

TVC: Television Commercial

WOM: Word of Mouth

LIST OF FIGURES

Figure 1.1: Sales by Product line 3

Figure 1.2: Volume share of Mama milk in 2009 6

Figure 1.3: Volume share of Mama milk industry 2012 7

Figure 3.1: Customers insight 17

Figure 3.2: Integrated Marketing Communication 2013-2015 20

Figure 3.3: Direct Marketing Channels 25

LIST OF TABLES

Table 2.1: Compare between milk companies 13

Table 2.2: Compare activities on market between milk companies 13

Table 3.1: Details of Mama class, Workshop and Health Consulting 22

Table 3.2: Plan sales and budget from 2013-2015

LIST OF PICTURES Picture 1.1: Image of Mama GOLD old tin and new with precinutri formula 4

Picture 1.2: Image of Dulac GOLD 1 old tin 4

Picture 2.1: Brand and Customer Ecosystem 15

Picture 3.1: Dumex Mama’s product information 19

Picture 3.2: Illustrate for Dumex Mom Club 24

CHAPTER 1: DISCRIPTION OF THE CASE

1.1 About Vietnam milk industry

The population of Vietnam is approximately 90 million people and the economy

of Vietnam is in developing stage, thus the living standard of Vietnamese is going up through one decade The GDP of 2010 was US$ 100.5 billion Vietnam’s GDP growth was 5.3 percent in 2010 and this is expected for the next few years Consumer spending

on food and beverages is growing up Therefore, milk and other dairy products become common in the Vietnamese life, if before 90s we had only one or two companies produce and distribute milk, mostly is powder milk and condensed milk, nowadays, milk market have around 20 domestic producing company and a lot of foreign companies distribute milk in this potential market During the last few years the milk industry has rapidly increased, due to high local demand for milk products in consumption and the new policy on the milk industry development from Government

of Vietnam Milk consumption in Vietnam will grow between 12% and 15% by 2015 according to Vietnamese Information Center for Agriculture and Rural Development (Agroinfo) The consumption in 2010 is 14,6 litres of liquid milk per person annually

In comparison, China consumed 23 litres of milk in 2010 and in Finland over 180 litres

in 2010 with four main products, namely:

 Powder milk: the upper range of the powder milk market is still the most profitable one and also the market is showing the fastest growth

 Liquid milk: is growing very fast with more than 55% dominated by Vinamilk

 Condensed milk: is still representing a significant share of the whole market and does not grow much and is today dominated by the Vietnam dairy market leaders, Vinamilk and Dutch Lady

 Yogurt: is growing and currently dominated by Vinamilk with new competition from new entrants such as Kido

Milk production in Vietnam has rapidly increased, however the requirements for domestic consumption has increased even faster, so milk production in our country do not meet short of the local market demand So an increasing demand for milk and growing population requires the country to examine its milk industry Even the speed is growing fast, but the history of milk production in Vietnam still young and lack of experience when compare with other countries in South East Asia Therefore, the Vietnam milk industry has many limitations; e.g Lacking technical staff, lack of suitable tropical grasses, and lack of some service for animal… However, belong to the Agroinfo, the milk using rate in Vietnam is growing very fast, the first is the powder milk with the average rate is 28.9% from 0.07kg / person (1997) up to 4kg / person (2009) and diet milk with the 20% average rate

1.2 About Danone Dumex

1.2.1 Overview

Danone Dumex is a part of the international Groupe Danone Danone Dumex manufactures infants’ and children’s nutrition products and its state – of – art Nilai plant, and these products are then distributed in Malaysia and Singapore with exports

to twenty countries in Asia, Middle East and Europe Its products span the maternal and growing up milk categories, and are sold mainly in south-east Asia and China Danone Dumex has been a household brand in South-East Asia since the 1940s It entered the China market in the late 1990s Nowadays, Danone Dumex is fast becoming a choice for infants and children’s nutrition in the South-east Asia countries with the highly recommended product by medical professional Today, Danone Dumex and its related brands are represented in most of the Asian region Therefore, Danone Dumex is the market leader and ranked number one in overall customer satisfaction in

a study conducted among medical professionals and retail trade by AC Nielsen

In 2007 in Vietnam, the officically office of Groupe Danone is opened at Ho Chi Minh City, and until the 2009 with the government policy to help foreign company, the Danone Vietnam is founded Danone have Dumex brands which is one

of the top milk brand in market Dumex is the fastest growing infant formula brand in the past few years Dumex just have been in Vietnam for the few years, but from the beginning until now it always become the top of milk product with highly recommended by the doctor from the nutrition hospital Vietnam dairy products market still young, therefore Dumex have a big part of the milk market cake

1.2.2 Product line

Danone operates in four main sectors, including Fresh Dairy Products, Waters, Baby Nutrition and Medical Nutrition (see the figure 1 for Danone’s sales by product line in 2009) Danone is the world’s leading producer in volume of Fresh Dairy Products, selling a total of 5.1 million tons in 2009 The division of Fresh Dairy Products has a global market share of some 27%, accounts for about 60% of the group’s sales and posted growth of 4.6% in volumes in 2009 In 2009, the Fresh Dairy Products division posted sales turnover amounting to EUR 8.6 billion

Figure 1.1: Sales by Product line

(Source: Danone Economic and Social Report, 2009)

Danone has a strong historically in Europe for the fresh dairy products, therefore, now the company want to developing its business in new countries as well as taking advantage of the more rapid growth of emerging countries such as Thailand, Vietnam, Indonesia…

Below are two of some Danone’s products in Vietnam market:

+ Dumex Mama gold: is the high class - fomula milk for pregnant and lactation with low fat content and attractive taste Because of the pregnant and lactation is very important for both children health and the mother, hence, the mother need to have a balance and good regime The Dumex Mama Gold has the immunoforce, DHA, Folate, Calcium and low fat ingredients For all of these ingredients will help the child have a good health and growing up In beginning of 2013, Danone launched new version of Dumex Mama Gold with precinutri formula in new package image

57%

17%

20%

6%

Sales by product line

Fresh Dairy Products Waters

Baby nutrition Medical Nutrition

Picture 1.1: Image of Mama GOLD old tin and new with precinutri formula

+ Dulac Gold 1: this product for the baby from 0 to 6th month This is the health food to help baby add up the nutrition, good growing up and to strengthen immune systems for them Dulac Gold has DHA and AA, which the role is not only help the optic nerve and memory, but also increase their health and intelligence

Picture 1.2: Image of Dulac GOLD 1 old tin

And some other products namely the Dulac gold 2, 3, 4 Each of products will

be going with each stage of children life: from 6 to 12 months old, from 1 to 3 years old and over 3 years old

1.3 About competitor

Actually, the Vietnam milk industry is one of the most potential markets with a lot of domestic and foreign companies produce and distribute the milk in this market Thus, the competitive speed in the market becomes really harsh about the price, quality, promotion…

There are about 22 milk companies in Vietnam market and focus on all of three classes (A, B and C) Depend on the classes that they focus on; their products are positioned as premium, medium and economy

In Mama filed, we can list main competitors of Dumex Mama are:

- Enfamama by Mead Johnson

- Similac Mom by Abbott

- Dielac Mama by Vinamilk

- FrisoMum by Friesland Campina

- Anmum by Fonterra

Dielac Mama by Vinamilk is considered as economy product and targeted most

on class C So, it is not direct competitor of Dumex Mama Besides that, the rests are direct competitors and imported products as well as Dumex Mama

According AC Nielsen Retail Audit (2009), Dumex Mama’s share of volume was in the bottom group with FrisoMum and Anmum (about 5%) There was a big gap between the bottom and the top (about 20%) Even that, in internal report of Marketing department, Dumex was mentioned with 5% share of value in market

We can see that not only in volume but also in value, Dumex has quite low market share And that is very difficult for Dumex Mama while gaining the share with

big competitor at this time

Figure 1.2: Volume share of Mama milk in 2009

(Source: Retail audit AC Nielsen, 2009)

Mar'08 Apr'08 May'08 Jun'08 Jul'08 Aug'08 Sep'08 Oct'08 Nov'08 Dec'08 Jan'09 Feb'09 Mar'09 Apr'09 May'09 Jun'09 Jul'09 Aug'09 Sep'09 Volume Sales (Kg) 66,572 61,570 63,238 60,349 58,803 60,515 58,230 54,794 51,501 50,533 52,950 52,778 65,265 59,059 67,368 60,516 62,229 58,666 54,104 Similac Mom 21.7 23.3 24.1 24.1 23.1 22.5 24.5 23.9 22.4 17.8 15.3 17 26.1 23.5 24.1 21.5 22.2 21.5 19.9 Enfamama A+ 37.6 34.1 33.9 36.3 37.4 36.4 34.6 32.4 38.7 37.3 39.9 40 33.9 33 33.9 32.7 32.3 27.5 28.8 Frisomum 2.5 2 4.1 3.2 4 4.3 3.1 3.5 3.1 3.4 3.9 3.8 2.5 2.3 1.7 2.3 2.2 1.7 2.2 Anmum 4.3 6.6 5.8 6 4.8 6.4 5.9 5.3 5.3 7.3 5.1 5.4 6.7 5.7 5.7 6.6 4.9 6.1 6.3 Dumex mama Gold 3.1 3 4.5 3.5 4.3 4.1 3.7 4 3.3 3.5 3.6 3.1 4.5 4.8 4.2 6.2 6.3 7.1 5.4 Dielac mama 24.5 25.8 20.8 20.1 18.7 19 22.2 26.4 22.3 25.2 28.4 26.5 22 26.2 26.6 26.8 28.8 32.6 34.1

21.7

23.3 24.1 24.1 23.1

22.5

24.5 23.9 22.4

17.8 15.3

Figure 1.3: Value share of Mama milk industry 2012

(Source: Danone Marketing Department, 2012)

1.4 Objective of the thesis

Dumex Vietnam with the mission and vision is “bring the good health for every

people by the good food and milk” Company is researching and developing the new

products which suit the Vietnamese environments and the Vietnam living conditions Company has a main slogan with four words “human civilization, straightforward, close with the social life, and enthusiasm”

Dumex products are directly in line with nature’s cycles Therefore, in order to accomplish its mission of providing healthy food products to as many people as possible, the group feels it is essential that they are involved in safeguarding ecosystems This commitment is also a means of responding to their consumers’ current and future demands

And the objective of this project to help the Dumex and Danone Vietnam build the effective communication plan, which can help company gain more awareness Beside that it also improve brand image of Dumex Mama gold year by year through three years project

Value share - Dec 2012

ENFAMAMA A PLUS Mead John Son

SIMILAC MOM Abbott

FRISO GOLD MUM FrieslandCampina ANMUM Fonterra

DIELAC MAMA Vinamilk

DUMEX MAMA GOLD Danone

Others

CHAPTER 2: ANALYSIS THE CASE

2.1 SWOT analysis

+ Strength:

- Danone is one of the most reputable brands for consumer goods worldwide Danone is reported to be the leading brands in Europe and Asisa In FY 2011, Danone was the global leader in fresh dairy products capturing 21% of the market shares The group is also the second largest in baby nutrition globally, and the largest in Europe in

FY 2011 With the preference for foreign products, it is very favorable for Danone to capture the market if the awareness for their product is widely known.1

- Danone also have diverse revenue streams from many product lines and across geographic regions Product lines for Danone include fresh dairy products, waters, baby nutrition and medical nutrition In FY 2011, the group generated 58.2% from total revenue of fresh dairy products, 19% from baby nutrition 16.7% from waters, and 6.1% from medical nutrition division The group also operates about 25 countries, including mature and emerging markets2 In 2011, emerging countries for the first time

in Danone history, accounted for over half of the sales in total business This allows Danone to have good opportunities and resources to position itself and seize growth

opportunities later on (Source:http://www.danone.com/en/company/introduction.html)

- All of Danone products are imported full box from factory in Malaysia Because of that, Danone does not face with fake product problem like others

+ Weakness:

- Apart from the advantages, the fact that Danone is an international milk producer also create some disadvantage to the brand Being the foreign company, Danone will not be able to fulfill the needs of all the Vietnamese customers due to the nature of the product Some type of milk cannot be store for a long period of time Therefore, Danone can only be present in some product segment that can be store for a long period of time This situation also applies to other foreign milk producers in Vietnam, leaving the pure milk segment to the domestic producers

- As the government and domestic producers want to promote the campaign of

“Vietnamese use Vietnam made goods”, most of the article was criticizing the quality and prices of foreign made milk product The series articles also promote pure milk

1

MarketLine report

2

product as the better type of milk to consume as most of the domestic producers focus

on pure milk segment and foreign product focuses on powder3

- In the long-term, this might create barriers to Danone, as domestic producers can strengthen their product on the long storage life segment and decrease the foreign product market shares Therefore, unless Danone can extend their product lines to include short storage milk product, it will be difficult to face all the domestic producers who have local knowledge and is backed up by the government

- The investment from Danone international to Vietnam is lower than others so budget for Marketing also low as well This is the reason while Dumex does not appear

on media like other competitor

- Dumex Mama only has vanilla taste while other has chocolate, strawberry, orange, etc Customers have more choice with competitors

+ Opportunities:

- As the economy of develop, Vietnamese consumers enjoy higher disposable income The consumers will, therefore, be more willing to non-essential goods This creates chances for companies in Vietnam to create more diverse products to fulfill these demands One of these demand is milk consumption, there is reported that the growth of demand for fluid milk consumption will increase significantly from now to

2015 A report of Exporter Guide of New Zealand estimate dairy sector in Vietnam to

be valued at US$476.6 million in 2010 and is expected to grow about 7 percent for annum from 2011-2015 A report from Business Monitor International Ltd forecast the consumption of liquid milk in 2015 is expected to be about 238,000 tones, grow 31.4% compares to 2010 Whole milk power consumption is expected to be at 34,200 tones in

2015, compare to 33,200 tones in 2010 The growth of milk market in Vietnam has created opportunities for companies to create more products to fit with the needs of various segment Vietnamese perception now has change from “milk is just for kid” to milk is essential to the health of pregnant woman and old age

- With the fast developing of the market, there is also report says Eurocharm wants Vietnam to allow the prices of milk to be unregulated and decides by the market4 If Vietnam deregulates the milk market, there is a larger chance for Danone to launch more products that will fit with the needs with higher segment in Vietnam market

- With the growing demands for dairy product, there has been many foreign companies trying to enter Vietnam market recently Notable is IMEKO, one of the top dairy producers in Netherlands, has launched Kanny brand5, Groupe Batteur launched Physiolac6 into Vietnam market at the end of 2012 UBIFRANCE, a French business association has also hold some meeting with Vietnamese companies to assess the chance to penetrate into Vietnam market7

- Not only facing threat of increase competition in Vietnam market internationally, Danone also need to monitor the competition from Vietnam companies

A report from Vietnamdairy.org shows that the production of milk domestically in Vietnam from 2005 to 2012 has increased 40.2% Furthermore, leftover inventory only account of 2.4% of the total production This number shows that the milk production domestically has been increased significantly, and the product is widely accepted in Vietnam to maintain the low leftover inventory Vinamilk has been reported to be heavily investing on its infrastructure to achieve its goal to be among 50 top dairy producers in the world in 2017 In 2013, Vinamilk will put in production one of the biggest plant in South East Asia into production Vinamilk has invested into a New Zealand’s milk powder producers, Miraka, in 20118 TH Milk also has been reported to invest 1.2 billion USD from 2010 to 2017 to increase their production It is estimates that with the investment, TH Milk will have 137,000 cows and a factory capable of providing 500 million litter of milk per year, enough to supplies 50% of the Vietnam milk demands9 With these investments, Danone can expect much more competition from domestic producers in the near future

- Another issue Danone should take into account is the number scandal relating milk product capturing the attention of the consumers recently There has been much news relating to the quality of dairy product and also the pricing of dairy product Danlait, EnfaGrow A+ (Mead Johnson) was criticized of not having the nutrition ingredient as mentioned in the advertisement The news also in a test done by Institute

of Hygiene and Public health mentioned out of 99 sample of milk power taken, there have been 37 samples having lower percentage of protein than advertised Out of those

5

http://dantri.com.vn/tu-van/them-mot-loai-sua-bot-xuat-hien-tren-thi-truong-666201.htm

6th-trng-vit-nam

http://www.diendantretho.com/gia-inh-mainmenu-73/tng-hp/527-sa-bt-cao-cp-physiolac-vao-7nam.htm

http://dddn.com.vn/2012121210281351cat106/dn-phap-quan-tam-den-thi-truong-sua-viet-8

dau-tien-tai-new-zealand

http://infotv.vn/kinh-doanh-dau-tu/dau-tu/60431-vinamilk-dau-tu-90-trieu-do-la-cho-du-an-9

http://www.baomoi.com/Thi-truong-sua-Viet-Nam-Nguon-cung-van-thieu-37, 6 samples come from foreign producers and 31 samples come from domestic producers10

- With the rise in capability of domestic producers, and the increasing criticism

of the media of the high price of foreign products in Vietnam, the combine effect might have an effect Danone and other foreign dairy producers in the long run Foreign products receive scrutiny monitor from the media on prices There is a report saying that in January and February, some of the milk producers have increase the prices, but

in March of 2013, a series of brand have increase the price and that makes a direct impact on the disposable income of the consumers The report saying that after Lunar new year, the milk price have increase 20% The reports also compared the quality of foreign products with the domestic produced milk and concluded that the quality of both kind of product produces no difference The domestic milk producer also have the advantage of being produce in Vietnam, less transport, therefore, the price is much cheaper Leveraging on the preference of using foreign products, the report also warns the consumers of the risk of coming across fake products branding foreigner famous brand The report ends with the call to use domestic produce milk 11

http://afamily.vn/doi-song/viet-nam-hang-loat-sua-bot-co-thanh-phan-khong-dung-nhu-11

http://baogiaoduc.edu.vn/chi-tiet/2-2384-sua-ngoai-loan-gia-tai-thi-truong-viet-nam.html