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MARKETING MIX OF VINAMILK’S LIQUID MILK

Student Name : DOAN NGOC TU


Tutor : Ms.Ngan
Date Due/ Submission Date : 28th September 2013
Module Title / Assignment Number: Individual Assignment
Topic :Marketing Strategies for Vinamilk’s liquid milk in VietNam
Table of content

I. Introduction………………………………………………... 3

II. Exucutive summary………………………………………. 3

III. Background information………………………………… 3

IV. Macro environment situation……………………………. 4

1.1 Economic…………………………………………….....4

1.2 science and technology………………………………....4

1.3 Culture…………………………………………………..4

V. Marketing strategies ……………………………………….5

1. Product………………………………………………......5

1.1Why choose fresh milk……………………………....5

1.2 Description of products and packaging…………….6

1.3 Orientation for product development……………….6

2. Price……………………………………………………....9

2.1 Identify the demand………………………………….9

2.2 Estimate cost…………………………………………9

3. Place ……………………………………………………...10

3.1 Select product distribution channels………………..10

3.2 Distribution structure ………………………………..11

4 Promotion…………………………………………………..12

VI. Conclusion………………………………………………….13
I. Introduction

“The new competition is not between what companies produce in their


factories but between what they add to their factory output in the form of
packaging, services, advertising, customer advice, financing, delivery
arrangements, warehousing, and other things that people value".

Harvard’s Ted Levitt.

II. Executive summary

In the market mechanism of the integration period, the battle between the
enterprises is not only competing with cheap quality. It really is a battle of prestige
brands. The nature of the brand reputation is the long-term viability, the
characteristics of the company, improve the competitiveness of enterprises and
products on the market, at the same time make the customers use the product of a
brand can be proud. It has created a huge requirement for businesses to build a
more effective strategy.

Vinamilk is the leading dairy company in Vietnam, located in the top 10 brands in
Vietnam.The ambition of the company is ranked in the list of 50 largest dairy
company in the world. One of the main strengths of Vinamilk is liquid milk
accounted for 55.4% market share in the country. Along with the participation of
many famous brands in the world market share in Vietnam. Vinamilk must develop
their marketing strategies. This report aims to introduce Vinamilk and their
marketing strategies in Vietnam special is liquid milk product. This report
includes basic information, macro trends, as well as the marketing mix of
Vinamilk’s liquid milk(pure fresh milk,..). Although marketing strategy of
Vinamilk until now is pretty good, but still a part of consumers do not know or do
not know about the company's products. With a growing selection criteria of
consumers, their images ads will help them be more widely known.

III. Background Information


-Vinamilk company was founded in 1976 and was named Dairy Company - Coffee
southern. Up to now, the company has over 200 products such as sterilized milk
and other dairy products.
-Accounted for 40% of the milk market in Vietnam.

-The main products of Vinamilk are: milk, liquid milk, yogurt, soy milk and other
beverages.

- Milk is nutritious foods have been known in a long time, increasing the quality of
life. Understanding the needs of consumers, many companies have been involved
in the dairy market potential. Calculate market shares according to the value
Vinamilk and Dutch Lady are the two largest companies, accounted for about 60%
of the milk market in Vietnam. Milk imported from foreign firms such as Mead
Johnson, Abbott, Nestle account for about 22% market share, with the main
products are milk powder. Obstacles to dairy companies is the heavy dependence
on raw materials imported and the price is very expensive.

IV. Macro environment situation:


1.1 Economic: Vietnam's economy is evaluated as potential, in recent times the
economy of Vietnam into a bad situation. Currently the inflation rate in Vietnam is
very high, Vietnam had to changes goals by inflation and a weak currency. From
here we found the sad truth for Vietnamese enterprises said general, and
VINAMILK particular. That is the challenge for Vinamilk product. Companies
need to have the right marketing strategy for the production and consumption of
products in a stable manner.

1.2 Science and Technology : Elements of science and technology not only
ensures the development of enterprises, but also create competitive advantage for
business. Currently the technology equipment that Vinamilk companies are using
meet international standards, import technology from many prestigious companies
the Trota Pak (Denmark), APV (Denmark). The equipment chains has the sync,
satisfy the quality requirements and food safety.

1.3 Culture : From ancient cultural values was the standard of living of all
Vietnamese people.The trend towards the source, uphold the tradition of their
ancestors, toward the traditional holidays, showing a heart. Vinamilk has struck a
chord with consumers when giving out advertising images of healthy cows in the
field, image advertising with content "six million cups of milk for poor children"
and other charity campaigns . That has created psychological and encourage
consumers to buy more products to support .

V. Marketing Strategies
1.Product
1.1Why choose fresh milk

-A study by the University of Reading and Cardiff in the UK has announced the
results of 324 research around the world relationship between human health and
the consumption of fresh milk.

-In milk contains protein can reduce blood pressure, positive effect on the blood
and heart.

-The research also found that people who drink about 0.5 liters of milk a day. Can
be reduced 15-20% risk of cardiovascular disease.

-The researchers also discovered that: drink milk helped reduce diabetes. And it is
feasible for other cancers, prostate, bladder. At the same time, the researchers also
reminded fresh milk is still mainly supply calcium to the body, so , milk is
especially useful for children.

-Children while growing up, if they drink milk every day mass index BMI is better
than the other kids. At the same time, reduce the risk of obesity.

-Vinamilk purchase 400 tons of fresh milk every day in the country. Also, VNM
has invested hundreds of billions of Vietnam dong to build farms, livestock
technology investment, mated technology, and many other things to ensure
supplies of high quality raw materials. Currently, there are four farms put into
operation in Tuyen Quang province, Lam Dong, Thanh Hoa, Nghe An. VNM
opened a dairy farm at Binh Dinh province with the scale about 2000 dairy cows.

-Besides, Vinamilk has invested sterile production line is considered to be the best.
Responding the rigorous standards of ISO 9001 for example, the standard of food
safety and hygiene. As a result of market research implementation by the FTA,
more than 90% of consumers voted for the Vinamlik’s fresh milk. It tasted
delicious, and was produced from 100% natural fresh milk .
1.2 Description of products and packaging

-Consumer trends currently are focus on design and packaging. Perceived this
trend, many companies have invested into packaging costs. Although after a
campaign, they might lose advantage of the sale price, but in return, revenue will
increase and consumers will remember the brand.

-Packaging vinamilk are simple, beautiful, convenient, so it caught the attention of


consumers. Get the main color is white, symbolizing the purity of the milk. Blue,
symbolizing the pasture. Besides, is the image of the dairy cow funny, cute,
healthy, full of life. It is characteristic for each fresh milk products of Vinamilk .

1.3 Orientation for product development

1.3.1 Opportunity to develop products

- Opportunity to develop pure fresh milk products expressed by 2 factors

The lack of fresh milk supply

+Expectations of consumer demand for fresh milk

Consumer demand for dairy products in Vietnam is generally expected


continue to rise. According to the Food and Agriculture Organization
(FAO). Currently, Asia is leading the world in growth of milk
consumption. In which, consumption level of dairy products per capita of
Vietnam is 14 liters / 1 person / 1 year, lower than Thailand and China.
Consumers mainly in the big cities in Vietnam, remote areas, rural areas
have no conditions to use, because the price is relatively high. So the
growth rate of milk consumption growth in Vietnam is very large .
Vietnam is a developing countries and the dairy industry is one of the
sectors with the fastest growth rate. With revenue growth rate of about
18% on average. In the next few years consumer demand for milk will be
higher because population growth, the rate of urbanization,
industrialization, consumer perceptions of the nutritional value of milk

The difference creates value Vinamilk 100% pure fresh milk


Pure fresh milk is the result of a combination of materials from pure milk
and pasteurized treatments to ensure the best quality for the consumer.

1.3.2Product name

+VINAMILK 100% PASTEURIZED MILK

+ STRAWBERRY 100% FRESH MILK

+CHOCOLATE 100% FRESH MILK


+VNM FORTIFIED UHT MILK

1.3.3 Evaluate the feasibility of the product

-Vinamilk 100% fresh milk have nutritional components such as fats, proteins.
calcium, vitamin B1, vitamin B2, and minerals for the health and height.

- The average height of the Vietnamese: females (153.9 cm), males (164.3 cm).
The average height of 165cm Thailand (men) and 155 cm in women, because they
are interested in the use of milk. Their health is better than the Vietnamese.
However, the proportion of milk use in Vietnam is growing .

1.3.4 Product Development

-Starting from product concept and market segment.Vinamilk will release the
products to meet those needs. Expressed by the product:
-VINAMILK 100% PASTEURIZED MILK ==> Responding nutrient needs from
6 to 12 years old .

Situation of research and development of new products

+ Currently, Vinamilk has put on the market more than 200 dairy products. With
the growth of the company, found that demand for milk in the domestic market is
still in the development stage. The company plans is to improve manufacturing
processes, plant, field to expand business operations .

2. Price
2.1 Identify the demand .

- Price is sensitive elements. The formation and movement of prices affected by


many factors such as inflation, supply, tax. Besides the demand growth is
stimulated by population growth, personal income, the impact of Western lifestyles
to Asia. Based on the analysis of the needs, demands for fresh milk. VNM has
developed two products, Vinamilk 100% pasteurized milk and UHT milk 95% (5%
sugar). Vinamilk understanding the consumer needs, nutritional needs .

- The price increase affects consumers. The average income of Vietnamese people
is lower than other countries. Minimizing the cost is one of the performance
criteria of Vinamilk. With consumers in Vietnam, the price is not the first criterion.

2.2 Estimated cost

-The price is determined by two factors: fixed costs and variable costs.

+ Fixed costs: Factory costs, taxes.

+ Variable costs: inputs, marketing, labor costs, packaging.

- According to estimates, Vinamilk purchase fresh milk from farms around 10.025
VND - 11.025 VND / 1 kg. The factory uses advanced technology from
Germany,Denmark and Sweden. VNM always interested in product packaging,
because it is very important.

- From the above analysis can estimate the price of a carton of milk (180 ml) is
4,500 VND, of which:
Milk: 1.700 VND

+ Packaging: 500 VND

+ Marketing: 300 VND

+ Wages: 400 VND

+ Production technology: 300 VND

+ Cost of sales: 300 VND

+ Estimated: 200 VND

+ Profit: 500 VND

+ Other expenses :300 VND

- The final price of pure fresh milk (180 ml) to the consumer is 5.200 VND.
Derived from producer prices, together with original price 4.500 VND. The
company estimates the cost to consumers after 5.200 VND through an agent and
intermediary sale of retail goods, including:

+Agents will receive 300 VND / one product.

+Retail stores will receive 400 VND / one product.

+If consumers buy directly from agents or stores, the price is 4.800 VND.

3. Place
3.1 Selected product distribution channels

-2 channels of distribution

-GT Channel Sales (General Trade) and MT (Modern Trade)

Why choose GT and MT ?

+Scale of operation: large-scale distribution, not only in urban areas but also in
rural areas. GT Channel can come in many markets. In urban areas MT channel
will operate effectively for affluent clients.
+GT Channel : 220 distributors and over 140,000 retail outlets. To support
distribution networks, VNM has opened 14 showrooms in large cities of Hanoi, Da
Nang, Ho Chi Minh City, Can Tho.

+Channels MT: 1400 1 dealer and distribution network across the country, with
more than 5,000 dealers and 140,000 retail outlets with product sales of VNM.

3.2 Distribution structure

M -> A -> R -> C

M : Manufacture .

A : Agency

R : Retail outlets

C : Consumers

-Customers who want to choose convenient places, easy to buy, is home to many
sellers so they chose GT channel. Regional reputation, high quality, who have
good incomes, they will choose channel MT.

-Objectives and business strategy: consolidate and improve the distribution system,
in order to gain market share in the markets that are not high market share.
Especially in rural areas and small towns.

-For channel GT: The company's policy is to expand the dealer, without limitation
about conditions.

-For MT channel: cooperation with the supermarket supply chain, Metro, Big C,
Co-op Mart.

4. Promotion
4.1.Adversiting

4.1.1 TVC (TV-Commercial) : TVC means that the short promotional video. With
a combination of images, movement, sound. Shown on screen anywhere.

-Form of advertising: advertising on HTV7, VTV1, VTV3 time under 35 seconds .


-Promotional video short but should impressive for consumers through images,
audio, charismatic. At the same time, must reflect the image of the product is dairy,
cheerful and lovely .

4.1.2. Radio

-Advertising on Zone FM

-Audio Clips 50 seconds, but must demonstrate the uses of fresh milk. For
example:

+Development height.

+Healthy Body.

+High resistance.

+Beautiful skin.

4.1.3 Responsor

-Funding for programs related to children and the elderly. Funding for the program
"Vinamilk nursery for Vietnam’s children “.

4.1.4 Social activities ( Public relation )

-Vinamilk has spent more than 17 billion Vietnam Dong for charitable activities in
2011. Nearly 25 billions Vietnam Dong in 2012 and 2013.

-Providing free milk to poor children in Vietnam. To create conditions for poor
children around the country enjoy nutritious milk.

-Taking care of the heroic Vietnamese mothers in some provinces such as Hue,
Quang Tri, Ben Tre and Quang Nam.

-Housing construction.

-Contributions to the fund gratitude, poverty, young talent.

-Supporting people affected by floods, occupational accidents.

4.1.5 Online marketing


-Today with the revolution of information technology, Internet users increasingly
popular. Online sales become an effective form. Vinamilk will open an online sales
channel for consumers for number 3 on the milk carton to make a purchase once.
The buyer will receive a code to order, and will be delivered at home.

-Also, Vinamilk also advertise on the website in Vietnam such as


www.mp3.zing.vn , www.vnexpress.com. With form such as banners, clip,
especially using website optimization tools (SEO) .

4.2 Sale promotion

-Vinamilk will hold a lucky draw. When the customers buy a bucket of fresh milk
100% pure Vinamilk, they will be awarded a lucky draw with attractive prizes such
as:

+Free use of fresh milk in 1 year.

+Donate a milk carton.

+English courses for free .

+Customers accumulate points by collecting boxshot stamped it, in exchange for


the gift .

+ Program-specific discounts on holidays, Christmas, Tet holiday.

VI. Conclusion
As a leading company in the field of food, Vinamilk brand is a famous brand in
and outside Vietnam.With the desire to provide the best quality for the consumer
as well as its spiritual value.Continuous improvement, always improving product
quality, with the development of marketing policy.Hopefully in the not too distant
future, Vinamilk is a brand in the top 50 of the world.