Principle of Marketing - Vinamilk

HANOI UNIVERSITY
FACULTY OF MANAGEMENT & TOURISM
FACULTY OF MANAGEMENT & TOURISM

SPOONABLE YOGURT - VINAMILK

SPOONABLE YOGURT - VINAMILK
Tutorial 3:
Tutorial: 3
Lecturer: Nguyen Phuong Lien
Lecturer: Nguyen Phuong Lien
Nguyen Minh Duong
Tutor: Nguyen Minh Duong
Group 2:
Tran ThiGroup
Students: Luyen2
Thieu Thi Huyen
Tran Thi Luyen - 1906090058
Vu Nguyen Linh Chi
Thieu Thi Huyen - 1906090044
Tran Nhat Quyen
Tran Nhat Quyen – 1904010088

Vu Nguyen Linh Chi - 1904000024

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 Principle of Marketing - Vinamilk

Table of Contents

I. Summary Executive ........................................................................................................................ 3

II. Introduction ..................................................................................................................................... 3
III. Marketing environment ............................................................................................................... 4
1. Internal environment ....................................................................................................................... 4
2.Micro environment........................................................................................................................... 5
3. Macro environment ......................................................................................................................... 7
IV.Marketing situation ........................................................................................................................... 8
1.Consumer behavior: ......................................................................................................................... 8
2. Marketing strategy: ....................................................................................................................... 11
3. SWOT Analysis ........................................................................................................................... 13
V. Marketing Program (4Ps) ................................................................................................................. 16
1. Products........................................................................................................................................ 16
2. Place .............................................................................................................................................. 18
3. Price: ............................................................................................................................................. 19
4. Promotion:..................................................................................................................................... 20
VII. Main issues .................................................................................................................................... 22
VIII. Recommendation ......................................................................................................................... 22
1. Marketing objectives ................................................................................................................ 22
2. Action program ......................................................................................................................... 23
IX. References....................................................................................................................................... 24

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 Principle of Marketing - Vinamilk

I. Summary Executive
From the beginning until now, Vietnam’s dairy industry has experienced a continuous
increase. It is the reason why there have gradually been companies entering the dairy market
such as TH true milk, Dalat milk, Nutifood,etc. However, Vinamilk group always occupies
the first position in this industry in Vietnam over the years. To do this, Vinamilk usually tries
to maintain the stable development in every aspect from analysing the effective SWOT model
to creating powerful marketing strategy & marketing program and so on. Whereas, it is very
inevitable that there are some existing risks that the company does not still solve suitably.
This report, based on secondary research, discusses the marketing research of one of
VINAMILK's products – eating yogurt. First of all, the research gives you information about
the current marketing situation (internal environment, micro one, and macro one) of VNM
yogurt. Second, a SWOT analysis of the product will be presented clearly in the paper.
Following SWOT analysis, we will state the important problems related to the products.
Third, it is very important that marketing strategies and marketing objectives should be
analyzed to solve the mentioned issues and achieve these objectives. The last thing
indispensable for this marketing research is to propose an action program and illustrating
products, posters, TVC, etc so that all staff in the company can follow and run the whole plan
to improve current major problems.
II. Introduction
VINAMILK (VNM), whose official name is Vietnam Dairy Products Joint Stock
company, was established on August 20, 1976, on the basis of three dairy factories from the
old regime. Its main office is located in District 7,
Ho Chi Minh city. When mentioning the mission
of the company, the Chief Executive officer of
VNM named Mai Kieu Lien said that: “To
manufacture one of the leading products in the
market, we must be always innovative. Innovation
is a vital element!”.
It is the reason why VINAMILK has been
consecutively holding the first position of the
dairy market in Vietnam in recent years. It has
been shown in the website viettrade.com that the company includes 15 factories and 7 Global
G.A.P certificate farms and manufactures more than 250 products and services which is
mainly made of both buttery and milky, consisting of Powdered Milk, Infant Cereal, Milk
Drink, Condensed Milk and value-added ones as yogurt, soya drink, ice cream, etc. The
leading nutrition group in Vietnam prides itself on having presented to more than 30
countries all over the world, especially some big markets such as China, Japan, New Zealand.

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It is noticeable that most of Vinamilk's products account for the highest market share in
Vietnam’s dairy market. Especially, spoon yogurt which discussed most in this report often
amounts to over 80% during many years. Other products as condensed milk, liquid milk ,
powdered milk also comprise the highest percentage of market share in Vietnam. From 2019
to 2020, Vinamilk was honored to rank the first place among 50 enterprises by Forbes
magazine. In addition, the group bought Moc chau company in the last month of 2019.
III. Marketing environment

1. Internal environment
1.1 The Vinamilk ’s organization chart
Vinamilk's organizational chart is shown and allocates departments scientifically and
appropriately, decentralizes the responsibilities of each member and department in the
company. Organizational chart helps them operate in the most effective way, as well as
helps their departments coordinate more closely:

The Annual General Meeting

GENERAL
Board of Management
MEETING
Inspection
GENERAL Committee
Chief Executive Director
MEETING

Internal Control And Risk

Internal Audit Director
Management Director

Executive Directors

Organization chart ( vinamilk.com)

1.2 Market share
According to website nhipcaudautu.vn, it is Milk market share 2020
estimated that Vinamilk still holds the highest Others
Vinasoy 15%
market share in the domestic dairy industry by the
6%
end of 2020 with 43.3% . If including Moc Chau
Nutifood
Milk, these two companies account for more than 7% Vinamilk,
45.4% of the market. Behind Vinamilk is Abbott 43.3%
5% TH
FrieslandCampina with 15.8%, while the rest of
Friesland True Moc Chau
other businesses hold less than 10% market share. Campina Milk Milk,
15% 6% 2.1%
More specifically, Vinamilk is currently the
leading enterprise in the dairy processing industry, accounting for 75% of the sweetened
condensed milk market share, 90% of the yogurt market share, 50% of the fresh milk market
share and 30% of the powdered milk market share in Vietnam (marketingai.admicro.vn).
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1.3 Sales
Accumulation of the whole year 2020, the
total consolidated revenue reached 59,723 billion
VND, an increase of 5.9% over the same period
in 2019. Consolidated net revenue reached VND
59,636 billion, in which:
Domestic net sales reached VND 50,842
billion, up 6.9% with a steady market share
compared to 2019 thanks to a suitable marketing
strategy. Regarding Moc Chau Milk, net revenue reached VND 2,823 billion, up 10.3% over
the same period in 2019 and completed 97% of the year plan. Foreign net sales reached 8,794
billion VND, a revenue growth of 7.4% compared to 2019.
1.4 Strategic business units
It is noticeable that most Vinamilk
products lie in the star stage, consisting of
eating yogurt. Spoonable yogurt is one of the
potential products that Vinamilk should
develop strongly. The products account for
high market share (Relative position) in the
eating yogurt in Vietnam( over 80%). It is
also clear that it is the product that has
extremely high competition in Vietnam's
market, as well as international market (high
Business growth rate). As a result, Vinamilk's
yogurt is considered to belong to the star
stage.
(Source:https://blog.hocexcel.online/mo-hinh-bcg-
matrix-xet-tren-cach-tiep-can-vong-doi-san-pham.html)

2. Micro Environment
2.1. Customers:

With the spoonable yogurt product line, Vinamilk targets consumer markets like families,
children and women in Vietnam. Beside that
reseller markets buy products to resell for profit,
and Vinamilk also exported yogurt to
international markets with over 40 countries such
as Thailand, Laos or developed countries:
America, Australia, etc.

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2.2 . Suppliers:

As of 2019, Vinamilk's herd of dairy cows is up to 1,30000 heads while the company also
owns 12 farms qualified GLOBAL G.A.P which are in operation. This effort helps import
inputs and reduce dependence on imported sources from abroad. Specifically, yeast for the
production of Vinamilk yogurt is imported from Denmark, a country specializing in
producing yeast. Each litter of yeast is guaranteed to be disposable only once to ensure the
product quality is stable.

2.3 . Marketing Intermediaries:

Vinamilk has been exerting to utilize a variety of marketing intermediaries to bring as many
products as possible to final buyers. To do that, Vinamilk cooperates with distribution
channels. Vinamilk has made its products widely available to consumers. This includes 251
retail branches across the country mentioned in the annual report 2019. Moreover, Vinamilk
also opens a chain of nearly 100 online stores called "Giac Mo Sua Viet" allowing customers
to buy goods via the internet platform, helping to increase product accessibility.

2.4 . Publics:

Vinamilk succeeded in growing sustainability and became the famous brand chosen by
most Vietnamese consumers for 8 consecutive years. Moreover, they have reached more than
80% of households thanks to their advertising and media activities emphasizing the
nutritional value as well as innovating their products (Thu Trang, 2020). Therefore, they
have been able to build strong connections with the public and become prestigious businesses
in consumers’ minds. On the other hand, Vinamilk’s plan mainly focuses on the Southern
market, so that the North will be their missing market.

2.5 Company:

The organizational structure of VNM has made a significant contribution to guaranteeing

the company operates systematically and efficiently. The structure includes Shareholders
Meeting, Board of Directors, CEO, Internal Control and Risk Management Director, Internal
Audit Director, and Executive Directors. By this corporate governance, the departments in
Vinamilk are partitioned logically with a hierarchy of responsibilities that is conducive to
collaboration among departments.

2.6 Competitors:

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Vinamilk has to face both domestic and foreign competitors in

the dynamic and competitive environment such as domestic
competitors: Dalat Milk, TH True Milk, Nuti Food, Well, Ba Vi
Farm, etc, and foreign competitors: Zeus Greek, Emmi from
Switzerland, Frutti from Russia, Love’s Farm from Australia
(IDP), etc.

Currently, Vinamilk is in the leading position (45.4% market

share in 2020). In a research in 2018 carried out by Vinasearch,
Vinamilk has always been a leader in various criteria such as
97,9% total awareness level, 77.9% was voted as a most
often-used product. Although TH with the product TH
True Yogurt is a latecomer, this company entered the
yogurt market as a "big man". Compared with the market
share of other products in the firm, yogurt only
accounted for 12% (annual report of TH-2019), however,
it is still following Vinamilk with 10.1 points popular
brand index. The next competitor of Vinamilk is Ba Vi
Farm with 4.2 PBI-being the third strongest competitor
in the yogurt market.

3. Macro Environment
3.1 Economic Force:

Economic factors play a leading role and have a decisive influence on the business
operations of the enterprise. The factors that strongly affect the business performance of
companies are usually the state of the economy. According to Minister of Ministry of
Planning and Investing, Nguyen Chi Dung, in 2020, the scale of Vietnam's economy has
reached about 343 billion USD, ranking in the top 40 largest economies in the world and
ranked fourth in ASEAN; GDP per capita reached 3,521 USD, ranking 6th in ASEAN (Prof.
Nguyen Minh Phong, 2021). The macroeconomy becomes stable, inflation is controlled at a
low level, and the balances of the economy have been significantly improved. This indicates
that the living condition of Vietnamese people has become better. These days, people start to
care more about health and beauty, therefore, the consumption of dairy products in general
and yogurt products, in particular, will have many growth opportunities.

3.2 Natural force:

According to Vinamilk’s 2020 annual report, Vietnam's climate has humid tropical
conditions, which is difficult to farm dairy cows. There is a limited number of temperate
climate areas such as Tuyen Quang, Lam Dong, Ba Vi, especially suitable for growing high-
quality grass in dairy farming. However, the climate is still detrimental to milk preservation
and processing, reducing the quality of outputs.

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Since 2020, the world has suffered the

heavy consequences caused by Covid-19 in
both society and the economy. This issue
has led to a deviation in dairy product
consumption due to the increase in spending
of middle - high-income people and the
decrease in spending of low-income people
(Minh Son, 2021). The demand of low-
income consumers tends to continue to
decline because their salary was negatively
affected during the pandemic. Howevers,
despite these severe impacts, Vietnamese dairy industry still achieves good results in winning
consumers, reaching a high position in the domestic market, and expanding to the global
market (Ngoc Thuy, 2021).

3.3 Technology force:

According to the Vietnam Dairy Association, Dairy enterprises have been invested in
modern technologies and equipment to develop their dairy farms following VietGAP and
Global GAP standards to raise the quantity, diversify, and quality of its product in both
domestic and international markets (Ngoc Thuy, 2021). The dairy factory currently operates
on an automatic, closed line, from input materials to outputs. Products are manufactured on a
closed technology line that follows the International Quality Management System ISO 9001:
2015 and FSSC 22000 standard. Therefore, Vietnamese dairy companies have shown
outstanding developments in quality of both inputs and outputs, as well as the stability in
manufacture and distribution to the partners and customers.

3.4 Social and cultural forces:

In the high-income consumer segment, people still prefer foreign products, believing that
the quality of foreign products will be better than the domestic ones. In contrast, for the
segment of low-income people or households living in rural or mountainous areas, their
purchasing power for dairy products is quite low. This requires dairy enterprises more effort
to raise more people’s consumption.

On the other hand, the tendency of using dairy products like yogurt that help support
digestion and improve body shape is increasingly popular thanks to the rise in household
income and people’s awareness of food safety. This factor has led to the yogurt’s strong
performance in 2019. Premium organic dairy products are also very appealing to consumers
as they focus more on health these days.

IV. Marketing situation

1. Customer behavior:

1.1 Culture

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The culture and subculture are sustainable core cultural values tending to last for a long
time. Vietnam is not a country with a tradition of milk production, so the majority of people
do not have the habit of consuming milk or dairy products like yogurt. Vinamilk has placed
more advertisements everywhere, and applied sales promotion to raise the awareness of
Vietnamese people about spoonable yogurt.

The next factor is the social class, customers who buy Vinamilk’s yogurt are in every social
class. They choose Vinamilk’s yogurt because of its high quality, reasonable price. With a
wide distribution channel in Vietnam, Vinamilk's yogurt is present in supermarkets and
grocery stores.

1.2 Social

One of the most effective ways to analyze consumer behavior is through groups’ opinions.
Vinamilk hopes to be the most beloved product in all areas so the quality and loyal customers
are Vinamilk's companions. Customers when using a kind of Vinamilk's milk product and
feeling satisfied then they will continue to use the other Vinamilk's other linear levels,
gradually starting to make a habit of purchasing. After having faith in all Vinamilk's
products, they will introduce them to their family and friends. This is a very important factor
to build a loyal customer's business with the Vinamilk products. For example, Vinamilk
introduced a new yogurt called “aloe yogurt”. They advertised the yogurt to the new flavor
making beautiful skin and body, which made an impression on all females at that time.

Besides that Vianmilk has to understand the characteristics of the family and make
appropriate marketing decisions. In family, the wives play a key role in yogurt consumption.
Furthermore, two main consumers of yogurt are children and women. Because Vinamilk
determines that family factors have a significant impact on customers' behavior. The yogurt-
choosing person is usually the woman, they often choose very carefully with references from
many sources both inside and outside the family.

Subsequently, the individual's roles determine their position within each group. When
promoting yogurt, Vinamilk often brings famous artists, comedians or celebrities to create
more trust with their customers.

1.3 Personal:

Consumers’ buying decisions are influenced by personal characteristics, including their age
and life cycle stage, occupation, economic situation, lifestyle, personality, and self-concept.
Regarding age and life cycle, people buy different goods and services during their lifetime.

Consumption is also shaped by phases in the family's life cycle. Therefore, people working
in marketing often choose the group of people whose purchase is based on the life cycle. For
instance, Vinamilk promotes the product line for children (Vinamilk Susu IQ yogurt) with
eye-catching advertising images and packaging. In addition, the company makes the parents
who select and pay for their kids, trust in the quality of products that provide calcium and
support the digestive system.

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Secondly, people's jobs also affect their spending. The company therefore needs to identify
groups of people based on their occupation with above average interest in its products and
services. Besides, the company can specialize its products for certain types of groups.

Furthermore, the economic situation also has an impact on choosing products of people. A
person's economic situation includes their disposable income, level of income, stability rate,
and time arrangement), savings, and assets (including percentages of assets that are stored).
For farmers or low-salary laborers, the knowledge of healthcare is very limited. Therefore,
they do not pay much attention to the specific features of products and do not specialize in a
certain product line.

Besides, the demand for dairy goods like yogurt of this group seems low. Moreover,
consumers' choice of goods can reflect their lifestyle. For people with healthy lifestyles,
eating yogurt is extremely appealing to them because of its obvious benefits to human health.

Lastly, personality and self-concept of consumers can affect Vinamilk dairy market since
each person has their own preferences about different kinds of spoonable yogurt. For
example, children aged from 2 to 15 years old like products with cartoon images, young
people like yogurts that they find delicious and affordable, and for the elders and adults, they
have a high demand for healthy products.

1.4 Psychological

A person’s purchasing choices are also influenced by a set of psychological factors

including motivation, perception, learning, and beliefs and attitudes.

A motive is a need that is aroused to a sufficient level of intensity. For the case of
Vinamilk, in the condition of an increasingly developing economy, the needs of people will
increase and they also care more about themselves. Hence, Vinamilk is offering products to
meet the needs of all audiences such as yogurt for children, yogurt for women, for family, for
people who are losing fat, etc.

In terms of perception, people usually have two types, one is paying attention to the
stimulus they are looking for, and the other is that people tend to be attracted to stimuli that
are more distinct from others. Based on this, Vinamilk has created advertising strategies for
people to pay attention to the company's products such as hanging banners and advertising on
the street.

Besides, the more society is developing, the more increasing awareness of the people, so
the demand for consumer products also becomes higher. Therefore, to meet customers'
requirements, Vinamilk always does market research to see what consumers want to develop
products to suit the needs of consumers, so the company also has to ensure that their product
can compete with other products of the same type in the long term.

Finally, through activity and knowledge, customers will gain belief and attitude towards the
productions. Manufacturers are always concerned with the beliefs that people have about
their products and services. These beliefs create images of products and brands people act

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upon those products. With regard to attitude, it describes good or bad judgments based on a
person's perceptions, individual feelings, and motive to act on a production. In order to gain
consumer confidence, Vinamilk always provides products with quality, reasonable prices,
and is suitable with the increasing needs of consumers.

2. Marketing strategy:
2.1 Segmentation:

Segment Demography Geography Psychology Behavioral

Young • Age: 5-14 years Cities and This is a young • User status:
Children old Urban age entering the frequent
• Income: No Areas in process of users,
income Vietnam development, potential
• Education: which needs to users
Kindergarten, be supplemented • User rate:
Primary with many heavy
school, or nutrients, DHA users,
Secondary for development, • Tend to be
school and the training brand
process. loyal

Family • Variety of age and Cities and Use products • User status:
gender Urban with nutrients frequent
• Income: Middle Areas in like calcium and users,
income and above Vietnam protein for the potential
(bought by adults body, support users
mainly) learning and • User rate:
training activities heavy
for their children users
and themselves. • Tend to be
brand
loyal

Women • Adult Cities and Use products to • User status:

• Income: Middle Urban lose weight, get a frequent
income and above Areas in toned body, and users
Vietnam have beautiful • User rate:
and young skin. medium
users
• Tend to be
brand
loyal

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2.2 Targeting:

Vinamilk’s target market for spoonable yogurt products is the differentiated marketing,
mainly children at the age of 5-14 with middle-income parents, and women with an average
monthly income of VND 3 million or more. Instead of providing a single kind of yogurt to all
customers, Vinamilk offers different spoonable yogurt, with different tastes, uses, and
multiple promotions for each group of customers. VNM’s targeted segmentation still doesn’t
change until now, they target this market because of the following reasons.

Children at the age of 5-14 are the first target of

Vinamilk in the yogurt market. Firstly, this is the age of
development; therefore, they need a large number of
nutrients such as vitamins, DHA, calcium...to help to
balance the body and create a premise for their future
development. Secondly, parents always pay special
attention to children at this age, as a result, the demand
for milk at this stage is higher than the other periods.

Nextly, women with an average monthly income of

VND 3 million or more. Vinamilk's yogurt is selected
by many people with its delicious taste, familiar brand
name, and people can buy it easily everywhere.
Moreover women today are paying attention to clean
and convenient beauty products, especially those
containing collagen. Yogurt is favored for its natural
beauty properties, improving the skin from within, anti-
aging skin, helping to enhance health and resistance.

2.3. Positioning:

• Quality and Price: This positioning map 1 shows us two features: quality and price,
which reflect the position of Vinamilk in Vietnam’s yogurt market. We can easily see
that Vinamilk’s quality is considered to be higher than those of other brands such as TH
True Yogurt,.. Love in farm or imported brands: Zeus Greek, Fruttit but the price is
lower than the others. According to an online newspaper Vietnamnet (2020), Vietnam
still belonged to the group of low middle income countries; therefore, this positioning is
reasonable. Higher quality

Affordable Premium

Lower quality

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• Number of Distributors and Country of Origin:

Vinamilk is thought to possess the widest distribution network within the dairy industry
with 268 distributors with many supermarkets and showrooms. This advantage allows
businesses to effectively bring products to consumers. Regarding the origin of milk, Vinamilk
takes 25% of raw materials from its dairy farms in Vietnam and imports about 50% of raw
materials (Sacombank 2012; Vinamilk 2014). Its major competitor is TH True Milk, which
increases the biggest dairy cattle within the country providing 100% milk input (Nguyen &
Tran 2014).
More accessible

Domestic Imported

Less accessible
2.4. Differentiation:

The differentiation of Vinamilk is based on various factors, with the spoonable yogurt
product line Vinamilk focuses on its product, with natural fermentation technology
containing fiber and vitamin B, for instance aloe vera yogurt contains collagen helping to
have beautiful skin. Not only being different in products, VNM’s yogurt also varies in
flavors. Moreover, about the distribution, VNM provides retail systems across the country to
deliver fresh and delicious products to customers without preservatives. Subsequently, VNM
has often changed the image of the product as still being kept in the plastic box, but the
product's packaging and slogan are always renewed when introducing new kinds of products.

3. SWOT Analysis
3.1. Strength

The Vinamilk company, as well as its eating yogurt, has much power to grow and develop
prosperously. There are five major powerful characteristics of the group shown in this report.
First of all, Vinamilk has undoubtedly become the most renowned dairy brand in Vietnam for
approximately forty years. Vinamilk also accounts for an extremely high percentage of most
dairy products market share in Vietnam. Yogurt, which is most discussed in the report, held a
market share of 84.7% percent. It is also shown in this paper that vinamilk “ is among the 10
most valuable brands in Vietnam”

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Secondly, it is undeniable that Vinamilk always implements an effective and successful

marketing strategy. Vinamilk has spent too much money and time on its advertisements and
associated with lots of social and government organizations to carry out meaningful activities
and campaigns to the community, such as “ Sua hoc duong'', “share hanh phuc, doi yeu
thuong”, “Quy mot trieu cay xanh vietnam”. Moreover, Vinamilk has professional product
research and development (product R&D). It is the reason why the image of VNM products
marketed is often eye-catching and attractive to viewers.

Thirdly, a diversified product-wide distribution range is one of the strengths of Vinamilk.

As mentioned in the introduction part, the company presents many products to consumers as
yogurt, milk, cereal, drink, etc. At present time, Vinamilk covers the distribution channels of
63 provinces in Vietnam. It is also noticeable that the product appears in every supermarket,
shop, and website. Furthermore, the product was exported to about fifty countries in the
globe.

Fourthly, Vinamilk has stable and strong finance. It is clear that the group always receives
high total revenue and profits every year, even during the covid pandemic. At 2020 annual
shareholder meeting hold in HCM city, CEO of the company said that in spite of the effect of
COVID-19, Vinamilk’s total revenue and profit continued to increase from 3% to 7% in the
first half year of 2020.

Last but not least, the company always focuses on investing to develop the technology. Not
only does VNM have effective product R&D but also it has a strong technology one. There is
the fact that all of the Vinamilk factories were constructed with modern and high equipment
exported from European countries such as Germany, Italy. It is most noticeable that Vinamilk
is the only company in Vietnam to have systems using Niro technology (Denmark).
Therefore, the products of VNM is high- qualified and the company contains many farms that
were certificated Global G.A.P

3.2. Weakness:

One of the weaknesses of Vinamilk is the uncontrollable source of raw materials (Phuong
Thao, 2020). Due to increasing demand for dairy products, domestic raw materials of
Vinamilk only meet about 30% of production demand, while the company has to import the
rest (70%) from New Zealand, the US, EU, and Japan. On the other hand, yeast for the
Vinamilk yogurt production line is imported from Denmark, a country specializing in yeast
production. Consequently, it raises the cost of input, then, leading to an increase in the price
of outputs. However, Vinamilk is also stepping up the development of raw material areas to
serve the increasing demand of domestic people.

Besides many recognizable product lines such as yogurt and fresh milk, there are still some
weak brand products like formula milk and soy milk (phdessay.com, 2020). In the soy milk
market, it is hard for Vinamilk to compete with older competitors like Fami. Also, formula
milk has not gained the trust and loyalty of several Vietnamese consumers. Parents still
believe that imported products have more high quality and safety; therefore, they tend to
choose these goods over domestic goods.

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3.3. Opportunities

The first opportunity is materials supply. Vinamilk’s one has received support from the
government. Besides, imported material has been reduced tax rates. Decision No. 10/2008 /
QD-TTg of the Prime Minister sets a target for the development of the dairy industry with the
target that by 2010, Vietnam's dairy industry will reach 380,000 tons, 700,000 tons in 2015
and 1 million tons in 2020. With the above policy, the issue of raw materials for the company
is no longer a huge burden, helping the company control costs and input materials. Import tax
on dairy materials is lower than according to WTO commitments, this is an opportunity to
reduce production costs while imported milk powder accounts for 75%.

The second chance is high potential customer force and the great demand for dairy
products. This industry is in a growth phase, so Vinamilk has a lot of growth potential.
Moreover, the demand for dairy products in Vietnam is growing steadily. With economic
development, consumers pay more attention to health and use more dairy products. The
current average consumption of Vietnam is 14 liters/person/year, lower than Thailand
(23l/person/ year), China (25l/person/ year). Vietnam has a young population structure
(children account for 36% of the population) and the population growth rate is over 1% /
year, which is a very attractive market. The average income per capita increases by over 6% /
year.

Finally, competitors that are being weakened due to quality issues and Vietnamese
consumers' opinion of Vietnamese goods are being responded to. After a series of discoveries
about melamine-contaminated dairy products in China, neighboring countries, and the fact
that some finished milk powder products have a much lower protein content than announced
on the packaging, continue to be distributed. Currently in 2009 has contributed to promoting
the trend of consumers to switch to using products of reputable brands. This is a great
opportunity for Vinamilk to assert the quality of its products. Beside, the campaign
"Vietnamese people use Vietnamese goods" , the first campaign of dairy products, has
increased the competitiveness of domestic dairy companies, including Vinamilk.

3.4. Threat

The first threat of Vinamilk in the yogurt market is the participation of many strong
competitors, especially large dairy companies in the world such as Nestle, Dutchlady, Abbott,
Enfa, Aniline. , Mead Jonhson, etc. Moreover, the tax reduction that Vietnam has committed
when joining the WTO is to reduce the tax on dairy-related items such as butter, yogurt from
10% to 3% or 7%. This is an opportunity for competitors of Vinamilk's paintings to make it
easier to penetrate the Vietnamese market.

The next one is that the input materials are not stable. Although investing in many dairy
farms according to international standards, the company's main raw materials still have to be
imported from abroad. The farmer being pressed by the collectors of raw milk, making the
domestic source of raw milk significantly reduced. The reason for this problem is that the
current dairy industry in Vietnam is mostly household (95%), the total output of fresh milk
only meets 20-25% of the milk consumption.

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Lastly, the export market is risky and the customers like to use foreign goods are also
considered as an urgent threat to Vinamilk. More than 90% of export profits come from Iraq -
this is a market with many risks in both political and economic terms. Therefore, the profit
from exports of Vinamilk is still not stable. The business field is sensitive, which directly
affects the health of consumers, and requires Vinamilk to always ensure product quality
because food safety issues can make consumers more apprehensive and apprehensive when
using dairy products. Moreover, the Vietnamese people's preference to use foreign goods is a
big challenge for Vinamilk and other businesses in the industry.

V. Marketing Program (4Ps)

1. Products
1.1. 3 layers of products

➤ Core customer value

To bring to consumers the international standard dairy products to ensure safety and improve
health. Becoming the leading symbol of belief in Vietnam about nutrition and health products
serving human life.

➤ Actual product

• Brand name: VINA is the shortened word for the ethnic name of VIETNAM. MILK,
when translating the English meaning as Milk,
would like to emphasize that Vinamilk's products
are derived from milk. VINAMILK is Vietnamese
milk, Vietnamese nutrition, helps supplement
nutritional resources for Vietnamese children.
• Features: In addition to nutritional supplements,
Vinamilk also offers beauty support products to the
market. Each product line has different types:
sugar, low sugar, no sugar, strawberry, aloe vera,
red pomegranate, ....

• Design: The packaging is designed in a simple, light style and is very suitable for yogurt
products. Main colors: White and blue. Outstanding printed product name contributes to
attracting customers' attention effectively. The
packaging also shows full product information.
• Packaging: Product packaging is made from
international standard quality material: plastic,
carton, metal, ...depending on the different type
of product. Sample of Vinamilk's yoghurt jars
has been certified for safety by the Technical
Center for Standards, Measurement and Quality

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for users since April 2009.

• Quality: Vinamilk - "International quality for Vietnamese families"
All fresh milk products of Vinamilk are made from 100% raw fresh milk. Thanks to the
extensive system of farms and factories, raw fresh milk is always transported quickly to
the factory by Vinamilk on modern tank trucks to keep
milk from 4 - 6 degrees Celsius - full of fresh taste and
nutritional content of milk. Vinamilk's world's leading
UHT sterilization technology, which completely
eliminates harmful bacteria in milk, helps the milk stay
fresh and delicious within 6 months without any
preservatives. (Vinamilk.com)

➤ Augmented product:

• Delivery & credit: Directly order in “ Giacmosuaviet”

Delivery address Order and delivery time

Nationwide • 10am pre-order: same day

delivery delivery

• Order after 10am: next day

delivery

Area no Vinamilk Delivery 3 – 5 Days Shipping: Minh

Store Phuong logistics

Delivery service is available from Monday to Saturday, except for Sundays and holidays.
Orders placed after 10am on Saturday through Sunday will be processed the following
Monday. Free delivery applies to orders worth at least VND 300,000 each (US$13.5).
Payment can be done by cash upon delivery and by debit or credit card including Visa,
MasterCard and JCB.

• Product support: Vinamilk has a hotline and email address to receive direct feedback
from customers. Nutrition counseling issues will be recorded by the Customer Care
department and transferred to the direct consultation doctor.

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• After-sale service: Customers need to check the status of the goods and can exchange or
return the goods at the time of delivery and receipt in reasonable conditions.
• Warranty: International food safety and hygiene standards as per ISO 9001:2008, FSSC
22000.

1.2. Product- life cycle

At present time, it can be said that VNM’s products lie in the mature period. With the first
place in Vietnam’s dairy industry, the group always gets enormous revenue and profit each
year. After over 40 year of operation, Vinamilk brought many high-quality products to
customers and attracted a great number of loyal ones. By reason, the brand is difficult to get
out of this stage.

2. Place
Vinamilk has widened the internal market by 2 distribution channels consisting of
traditional ones and modern ones.

2.1 Domestic market

About traditional channels, the group has applied Corporate Vertical Marketing systems by
combining with distributors and retailers. In Vietnam, the products of Vinamilk are always
available in most of the stores and accounts for a great number. As a result, it enables
consumers to buy its products everywhere and everytime. At present time, Vinamilk has 1
headquarter in Saigon and 3 brands in Ha Noi, Da nang and Can Tho. Moreover, it is
estimated that there are 241,000 retail outlets of VNM in the whole country in (VNCS
research center, 2017)

About modern distribution system, Vinamilk’s products are sold in most supermarkets in
Vietnam: Big c, Vinmart, Aeon mall,…and convenient store such as Circle K, 7-
Eleven,..According to VNCS Research Center(2017), There has approximately 3250
supermarkets in 63 cities and provinces selling the products of Vinamilk. In addition,
Vinamilk has focused on selling products by E-commerce. The official homepage of VNM
is: https://www.vinamilk.com.vn/en/

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2.2. International market

Not only is Vinamilk appreciated and loved in Vietnam but also it is strongly believed by
foreign customers, especially the Chinese – the most important market. The group has
cooperated with many abroad partners all over the world as mentioned in the previous part in
this research.

3. Price:

Price
Name of the product Capacity
(VND)

Vinamilk yogurt low sugar 20,400 4 boxes / lot

Vinamilk yogurt no sugar 20,400 4 boxes / lot

Vinamilk yogurt sweetened 20,400 4 boxes / lot

Vinamilk yogurt Kefir 28,000 4 boxes / lot

Vinamilk yogurt Star 16,000 4 boxes / lot

Vinamilk Aloe Vera yogurt 24,000 4 boxes / lot

Vinamilk ProBeauty Pomegranate Flavor 31,000 4 boxes / lot

Vinamilk ProBeauty Blueberry Flavor 31,000 4 boxes / lot

Vinamilk ProBeauty Aloe Vera yogurt 31,000 4 boxes / lot

Eating Yogurt Vinamilk Probi sweetened 28,000 4 boxes / lot

Eating Yogurt Vinamilk Probi Strawberry Flavor 28,000 4 boxes / lot

Eating Yogurt Vinamilk Probi Mixed Fruit Flavor 28,000 4 boxes / lot

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Vinamilk SuSu IQ yogurt sugar added 26,000 4 boxes / lot

Vinamilk SuSu IQ yogurt strawberry banana 28,000

4 boxes / lot
flavor

Vinamilk SuSu IQ yogurt apple banana flavor 28,000 4 boxes / lot

Vinamilk yogurt Black Sticky Rice Pudding 35,500 4 boxes / lot

3.1 Adjusting product prices considerably

According to Ms. Mai, Chairwoman and Chief military officer of Vinamilk, while the
company’s product quality is certified international standard, its price is much lower than the
price of foreign milk products. Besides, since the current market is highly competitive and the
income per capita in Vietnam remains low compared to other countries. , Vinamilk also
perceives that the rise of product prices would cause a decrease in purchasing of consumers.

3.2 Maintaining competitive prices

Product lines of yogurt and milk have overwhelmed the domestic dairy market for years. In
this situation, pricing is considered as one of the crucial strengths of Vinamilk within the
competition with its rivals. The merchandise prices of Vinamilk are not much different
compared to its competitors within the eating yogurt market. However, Vinamilk usually
features a slightly lower cost than TH True Milk, for instance, one lot of 4 Vinamilk
sweetened eating yogurt boxes cost 20,600 VND while the price for a lot of sample products
of TH true milk is 24,000 VND.

4. Promotion:
4.1.Developing effective communication:

Up to now, Vinamilk has always paid attention and invested in media, especially
advertising. With the spoonable yogurt product line, VNM has diversified its communication
from placing advertisements everywhere such as on social networking sites or TV. In
addition, the health message and product quality are also focused by VNM, with the hope
that through promoting its impressive yogurt products, every family, every generation can
increase product awareness and through that product impressions will be a yogurt line with
deliciousness, reasonably price, and health benefits.

4.2. Promotion mix:

Regarding advertising, VNM has used many methods in this campaign not only from
traditional channels such as TV, on social networking sites, newspapers but also has a
personal channel on YouTube with more than 1 million subscribers. Vinamilk has posted a

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lot of advertisements about product lines in general and yogurt in particular. With eye-
catching advertising images, meaningful messages, the audience has an impression on the
quality and price, such as eating yogurt to bring a young skin, a beautiful body for women, or
increasing the resistance for small children, etc.

Not only focusing on advertising activities, Vinamilk also highly appreciates the
importance of public relationships such as actions that bring sustainable values to society and
the community. As a result, many activities which are meaningful and social being carried
out, such as: Scholarship Fund "Vinamilk - Nurturing young Vietnamese talents", Milk Fund
"Vietnam continues to develop", Scholarship Fund” "One million trees for Vietnam Fund"
(The success of applying marketing mix 4Ps in Vietnamese Dairy industry, 2016).

Nextly, Vinamilk is applying sales promotion to encourage customers to buy more in the
last months of the year, the "golden week" or "gold shopping" programs have attracted quite
a lot of people. Vinamilk has also applied for many promotions with many different forms
such as: discounts and incentives for customers who are members of Vinamilk, exchanging
gifts when collecting many gift stamps, giving 15% of the quantity but the price was
unchanged. ( Communication strategies of Vinamilk. 2017)

Personal selling is a form of direct communication between salespeople and potential

customers to introduce and convince them to care about or buy products. Currently, Vinamilk
has a large and qualified sales staff, with a solid understanding of Vinamilk, an understanding
of customer psychology, and having a professional working style, and ability in good
communication, they are always enthusiastic in working and ready to share questions with
customers.

The final one is direct marketing, Vinamilk provides Internet users with the Official
website:https://www.vinamilk.com.vn/vi. By using it, customers can find all the detailed
information of each product and information about the company to reinforce customer
confidence.

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VII. Main issues

Being one of the most famous groups in Vietnam, Vinamilk has been doing well in the
company’s business. However, there are still some existing issues that the company should
try its best to solve as soon as possible.

First of all, the long-standing rivalry in the dairy market. In recent years, products made of
milky and buttery are very diverse and replaceable in Vietnam. As a result, there are many
companies entering the dairy market and gradually accounting for large market share in this
industry in our country such as TH true milk, Nutifood, Dutch lady. To maintain the first
position in Vietnam’s dairy market, Vinamilk needs to notice these competitors and always
have an effective and suitable marketing strategy to attract customers.

Secondly, the public’s attitude toward the products of Vinamilk company. Vinamilk has spent
too much money and time on marketing to build its brand image. However, customers don't
sometimes believe the source of raw material contained in VNM’s products. It leads to the
negative influences in the company's brand image which plays an essential role in customers’
buying decisions. By reason, Vinamilk should have many more campaigns, charity bringing
social benefit to improve its brand name.

VIII. Recommendation
1. Marketing Objectives

The mission has been with Vinamilk for a long time: “ To become the leading symbol of
belief in Asia about nutrition and health products serving human life’’ (Report: Beyond the
sea, 2017) leading to the marketing objectives in the current years. One of the most vital
objectives of Vinamilk is to attract new clients by focusing on promotion. Apart from the
official website of the company, Vinamilk does not yet have any source to access and collect
information of these individual customers to maintain customer loyalty. To achieve this
objective, Vinamilk should open more websites, online forums, etc so that individual
customers can easily cultivate and contribute ideas to understand more about the product.

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Before creating a marketing website, Vinamilk needs to determine some vital factors such as
targeted customers, Vinamilk can use softwares to exploit customer data such as Google
Trends, Google Keyword Planner, etc and combined with historical data in the process of
business contact with customers. Nextly, the company should research websites of
competitors to make their own marketing strategy. Besides that, Vinamilk should increase
brand website awareness on social networks, google ads, and increase website popularity by
getting customers excited about the range of content, leading them from one article to another
by placing internal links in the right locations.

Another Vinamilk's vital objective is to become a recognable brand associated with

sustainable development. The company participates in many social activities that aim to
benefit the community, for example, campaigning and organizing charity programs physical
examinations, or counseling sessions on nutrition. Through events for these events, Vinamilk
shows its deep concern for the human factor - the most important factor in improving life and
social development. From community activities, Vinamilk's brand will spread more widely;
therefore, when it comes to Vinamilk's name, people will immediately think of a brand that
always puts people first and focuses on the development of the whole society.

2. Action Program
Our group made an action programs and marketing plan for Tet campaign of Vinamilk
through these links:
https://drive.google.com/drive/folders/1H8DXE6oM9mQvfk8WdDuErhIr-
C4sVUQX?fbclid=IwAR04KYk3s4l8jeNbSmWDsh_By8rAReQgVsKVerD8IpNCGul4gEdz
rpflsX0
https://docs.google.com/spreadsheets/d/1llclxutsIR7J8P99bXCSKgg8qd3x3rrSmaFwyjD1FJ
g/edit?usp=sharing

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IX. References
https://www.vinamilk.com.vn/

Annual report Vinamilk (2020). Retrieved from:

https://www.vinamilk.com.vn/static/uploads/bc_thuong_nien/1585291614

Banking University HCMC., (May, 2015). Report: Analyzing the target market of Vinamilk.
Retrieved from https://123doc.net//document/2826833-phan-tich-thi-truong-muc-tieu-cua-
cong-ty-vinamilk.htm

Bảng giá sữa chua Vinamilk mới nhất tháng 5/2020 (2020). Retrieved from:
https://www.giadinhmoi.vn/bang-gia-sua-chua-vinamilk-moi-nhat-thang-5-2020-
d39374.html

Dang T., (2014). The success of applying marketing mix 4Ps in Vietnamese dairy industry :
Vinamilk – a typical case. Retrieved from https://www.semanticscholar.org/paper/The-
success-of-applying-marketing-mix-4Ps-in-dairy-
Dang/9fe0875577c6ef8313cfc690c2ceac042b71be55

Doanh nghiep va tiep thi (14 Jan, 2021). Retrived from https://doanhnghieptiepthi.vn/quy-
mo-nganh-sua-dat-135000-ty-dong-trong-nam-2020-vinamilk-dang-gianh-them-thi-phan-
161211401125320468.htm

Economics University., ( March, 2017). Report: Analyzing Consumer Behavior of

Vinamilk’s customers. Retrieved from https://www.123doc.net/document/495957-nghien-
cuu-hanh-vi-tieu-dung-sua-tuoi-vinamilk-cua-sinh-vien-khoa-kinh-te.htm

How will the dairy industry fare in 2021? (2021). Retrieved from:
https://e.vnexpress.net/news/business/industries/how-will-the-dairy-industry-fare-in-2021-
4220322.html

Linh T., (22 October, 2020). Marketing 4P strategy of Vinamilk. Retrieved from
https://marketingai.admicro.vn/chien-luoc-marketing-4p-cua-vinamilk/

Linh N., Giang T., ( 4 May, 2017). SWOT Analysis of Vinamilk. Retrieved from
https://www.scribd.com/document/139364902/SWOT-analysis-of-Vinamilk

Lịch sử phát triển của Vinamilk (2021). Retrieved from

https://www.vinamilk.com.vn/en/development-history/

Ma trận BCG của Vinamilk ( August, 3rd 2020). Retrieved from:

https://marketingai.admicro.vn/ma-tran-bcg-cua-vinamilk/

Minh Anh ( 21 Jan, 20121). Retrived from: https://nhipcaudautu.vn/kinh-doanh/ai-dang-

dung-dau-thi-phan-nganh-sua-3339241

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Mô hình SWOT analysis của Vinamilk ( August,5th 2020). Retrieved from:

https://marketingai.admicro.vn/ma-tran-swot-cua-vinamilk/

The success of applying marketing mix 4Ps in Vietnamese dairy industry (2014) : Vinamilk –
a typical case. Retrieved from: https://www.theseus.fi/handle/10024/85926

Three layers of products. Retrieved from :

https://expertprogrammanagement.com/2018/04/three-product-levels-kotler/

VNCS Research Center (2017). PHÂN TÍCH DOANH NGHIỆP. Retrieved from:
https://vncsi.com.vn/data/data/anhpnh/files/B%C3%A1o%20c%C3%A1o%20CTCP%20S%
E1%BB%AEA%20VI%E1%BB%86T%20NAM(HSX%20-%20VNM)-KQKDQ32019.pdf

Vị thế và cơ đồ kinh tế Việt Nam (2021). Retrieved from: https://nhandan.com.vn/nhan-

dinh/vi-the-va-co-do-kinh-te-viet-nam-631311/

Vietnamese dairy sector expands to international market despite Covid-19 (2021). Retrieved
from: https://sggpnews.org.vn/business/vietnamese-dairy-sector-expands-to-international-
market-despite-covid19-91249.html

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