MARKETING MIX OF VINAMILKS 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 Vinamilks liquid milk in VietNam

Table of contentI. Introduction... 3II. Exucutive summary. 3III. Background information 3IV. Macro environment situation. 4 1.1 Economic.....4 1.2 science and technology....4 1.3 Culture..4V. 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 cost9 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". Harvards Ted Levitt.II. Executive summaryIn 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 Vinamilks 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 Vinamliks 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 factorsThe 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 outletsC : 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 Vietnams 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. ConclusionAs 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.