Vinamilk Yogurt report 2019 PDF

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VINAMILKYOGURT REPORT2019CTCP Sữa Việt Nam (Vinamilk)Email: [email protected] Website: vinamilk.comVINAMILKYOGURTMARKETINGPLAN 2019####### Prepared by:####### Hoang Khanh Huyen####### Nguyen Thi Thu Van####### Nguyen Hoang Truong####### Ngo Duy HieuClass: INSEXECUTIVE SUMMARYThis marketing plan ...

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VINAMILK YOGURT REPORT 2019 CTCP Sữa Việt Nam (Vinamilk) Email: [email protected] Website: vinamilk.com.vn

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VINAMILK YOGURT MARKETING PLAN 2019

Prepared by: Hoang Khanh Huyen Nguyen Thi Thu Van Nguyen Hoang Truong Ngo Duy Hieu

Class: INS3042

TABLE OF CONTENTS EXECUTIVE SUMMARY _____________________________________________ 4 INTRODUCTION ________________________________________________ 5 1. Vinamilk Overview ______________________________________________________ 5 2. Product and Distribution __________________________________________________ 5 3. Vision Statement _______________________________________________________ 5 4. Mission Statement ______________________________________________________ 5 5. Core Value_____________________________________________________________ 6 6. Revenue ______________________________________________________________ 6 SITUATION ANALYSIS_______________________________________________ 7 1. Vietnam yogurt market overview ___________________________________________ 7 2. Products ______________________________________________________________ 7 3. Competitive analysis ____________________________________________________ 7 4. Macro-environment: _____________________________________________________ 8 CURRENT MARKETING STRATEGY & MARKETING MIX ______________ 12 1. Marketing Strategy: _____________________________________________________ 12 2. Marketing mix (4Ps) ____________________________________________________ 12 3. Projected marketing budget: _____________________________________________ 15 4. Controlling: ___________________________________________________________ 17 SWOT ANALYSIS ______________________________________________ 19 1. Strength: _____________________________________________________________ 19 2. Weakness: ___________________________________________________________ 19 3. Opportunities: _________________________________________________________ 19 4. Threats: _____________________________________________________________ 19 OBJECTIVES _________________________________________________ 20 CONCLUSION _________________________________________________ 21 REFERENCE __________________________________________________ 22 WORKING DISTRIBUTION TABLE ________________________________ 23 Auditor’s Report _________________________________________________________ 23 EVALUATION OF TEACHER _____________________________________ 24

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EXECUTIVE SUMMARY T h i s ma r k e ti n g p l a n w i l l a n a l y z e s e v e r a l p a r ts o f V i n a m i l k Y o g u r t, w h i c h i s t h e most popul ar a nd su cces sful yogu rt b rand in th e Vie tna m mar ket. The inve stigat ion focu ses o n an alyzi ng the yogu rt ma rket, in cludin g the ov ervie w, prod uct, compe tito rs an d the mac ro -en viron ment . Be sides, the resea rch figu res ou t t he cu rrent marke ting stra tegy , ma rket ing mi x an d S WOT ana lys is as well. From t he info rmat ion resea rched , an off icial a nd sp ecif ic ma rke ting plan for Vina milk Yogu rt du ring 201 9 wi ll be deve lope d.

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INTRODUCTION 1. Vinamilk Overview •

The Viet Nam Dairy Products Joint Stock Company (Vinamilk) is the country's largest private enterprise in Vietnam. The company was founded in 1976. For more than 40 years of development, Vinamilk has been contributing to the development of the Vietnam economy and dairy industry as well.

2. Product and Distribution •

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Vinamilk has more than 20 brands and 200 products including liquid milk, yogurt, infant cereal, powdered milk, condensed milk, ice cream, beverages, cheese and soymilk. So far, Vinamilk has 251.000 retail outlets, more than 200 distributors across the country. Besides, it is exported to 53 countries in the world. (2019’s report) Vinamilk yogurt is a dairy product produced by bacterial fermentation of milk. Recently, it has 6 yogurt brands with nearly 30 kinds of yogurt and different flavors.

3. Vision Statement

grade industry, “To become a world g rade brand in ffood ood and beverage in dustry, where pe ople put al rient and health produc ts” people alll their trust in nut nutrient products”

4. Mission Statement

deliverr the valuab valuable “To delive le nutrition to community with our respect, love and respons ibility” responsibility”

6 5. Core Value Vinamilk focuses on 5 values: • Integrity: Integrity and transparency in actions and transactions • Respect: To have self-respect, to respect colleagues. Respect the Company and partners. • Ethics: Respect established ethical standards and act accordingly. • Fairness: To be fair with employees, customers, suppliers and other parties. • Compliance: To comply with legal regulation, the Company Code of Conduct, and the Company’s procedures and policies

6. Revenue •

At the end of 2019, Vinamilk’s revenue reached VND 56.400 billion. Profit before tax was VND 12.796 billion. Profit after tax was VND 10.554 billion.

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SITUATION ANALYSIS 1. Vietnam yogurt market overview a. Demand of growth potent potential ial According to Euromonitor International, sales of yogurt in 2009 the total market in Vietnam increased by 11% compared with 2008, reaching 2.000 billion. However, until 2010, yogurt products sales reached 3,300 billion VND, 2012 was 5,737 billion VND and this figure is estimated at 12 465 billion VND in 2013. Accordingly, the rate of annual compound growth (CAGR) in sales is over 31%, 14% own production. According to the VP Bank Securities Company, yogurt is quite a potential item, with strong growth of 30% compared to other milk products. The rate of using yogurt is higher than milk in some countries recently. In France, it is 80:20; Singapore and Thailand are 70:30 to 50:50, Vietnam is about 50:50.

b. Yogurt market structure In general, yogurt is very diverse and has many kinds. In 2009, the analysis report showed that sales of Vinamilk yogurt scale 60% industry wide sales to 105.3 million. This growth is not small. Nowadays, Vinamilk holds 84% of the domestic market for yogurt, 16% held by other brands such as TH true milk, Ba Vi, Moc Chau, etc.

2. Products Vinamilk Yogurt has diverse kinds of yogurt with many flavors. Firstly, the original yogurt of vinamilk such as Vinamilk Yogurt (Sweetened, Low sugar or no sugar), Vinamilk 100% Fresh Milk yogurt. The drinking yogurt Vinamilk Probi (Sweetened, less sugar), Vinamilk Probi Melon Favor, Strawberry Flavor, eating yogurt Vinamilk Probi mixed fruit flavor, strawberry flavor. Vinamilk aloe vera yogurt, Vinamilk pomegranate yogurt. Vinamilk Probeauty.

3. Competitive analysis Vietnam yogurt market is the potential market, so there are many new yogurt enterprises willing to enter this dynamic market. This is also an important factor that can impact on market share as well as competitiveness of Vinamilk yogurt. Currently, Viet Nam yogurt market has many different kinds of products and a lot of yogurt companies such as: TH True Milk, Moc Chau, Dalat Milk, Love In Farm, etc., in which Vinamilk ‘s the strongest competitor having main market share is TH True Milk.

a. Strategies of TH True Milk:

8 TH True Milk is the leading company for producing yogurt in Viet Nam. In 2019, TH True Milk gained an impressive growth rate 8% market share after 3 years appearing in the market. Development strategies: •

Development products for heath.

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Finding the way to apply normal international practices consistently with corporation management.

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Implementing financial actions carefully, being aware that risk management, assets safekeeping and liquid maintenance are necessary to the company’s success.

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Developing and launching product marketing campaigns to meet customers’ demand, building the company’s reputation for competitive price, constant quality, great service as well as new product and service development.

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Investing in human resource, developing the ability of employees and giving them the opportunities to be shared in the company’s general prosperousness.

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Respecting standards about food and environment safety.

b. Strengths and weaknesses of TH True Milk • Strengths - Being the new product, the new experiences with consumers. - Owning the most modern yogurt processing equipment and technologies. - Distribution systems are wide in the whole country. - Having loyal customers. - Strong marketing in social media, TV… • Weaknesses - Market share is much lower than Vinamilk. - Brand is not common with consumers. - Price for production higher. - The product is not diversified.

4. Macro-environment: “There are many factors in the macro-environment that will affect the decisions of the managers of any organization. Tax changes, new laws, trade barriers, demographic change and government policy changes are all examples of macro change. To analyze these factors, managers can use the PESTEL model.’’ (Gillespie, 2007). Macro-environment has a large

9 influence on the growth of a company. It brings both opportunities and challenges for a company. It is very important for Vinamilk and other companies to analyze macro environment before implementing manufacture and business activities in order to seek profits. Analysis below will conduct macro-environment factors having impact on Vinamilk development.

a. Economic factors: Economics factors have a large impact on companies. These include interest rates, taxation change, economic growth, inflation, and exchange rates. Economic factors play an important role to determine the formation and development of a business environment. Highly and strongly developed economy will lead to increased laborers' income, and also increase purchasing power. This is an opportunity for businesses to meet customers’ demand, enhance company’s market share, dominate the market, and increase profit. According to Vietnam General Statistics Office, average core inflation in the first quarter of 2019 increased by 1.83% over the same period last year. Vietnam - Inflation Data

Inflation Rate (CPI, annual variation in %)

2015

2016

2017

2018

2019

0.631

2.668

3.52

3.54

2.796

In 2019, consumption growth rate was positive but low, reaching 2.1 - 3.9% compared to 2018, only equivalent to the consumer price index (CPI). Among the FMCG products, dairy products (accounting for 13% of total FMCG sales volume) is one of the categories with poor growth.

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Source: The World Bank.data The gross domestic product (GDP) growth rate in 2019 of Vietnam was at a high level in the last 5 years (7.017%); decreased by 0.059% compared to the last year because of COVID-19. The GDP growth rate of later quarter in 2019 was always higher than the former quarters.

Source: statista.com

11 In the current economy and yogurt market of Vietnam, Vinamilk has lots of opportunities to develop their brand, along with it, they also have some difficulties and challenges in development business activities.

b. Legal/Political: Creating a business environment whether good or not depends on law factors and the administration of the state. The enactment of the legal system having quality and put into life is the first condition to ensure a fair business environment, promoting businesses in the healthy industry’s competition. Vietnam's political and law system is stable. Vietnam has many incentive policies to attract foreign investors to create favorable conditions for capital and technology to help the yogurt industry open wide production. Besides, administrative procedures cumbersome being less improvement is a significant factor hindering foreign investors.

c. Social/Cultural: National Institute of Nutrition has shown a yoghurt 250gr box contains 370mg calcium to (compared to 300 mg of calcium in 250ml milk). In addition, the amount of vitamin D available in yogurt helps your body absorb calcium more easily. Especially for children, yogurt can make them taller. Just create a habit of eating yogurt every day for 2-3 adults in order to be healthy. That would make people tend to buy yogurt more and more. Yogurt becomes the beverage popular with Vietnamese families.

d. Technology: Technology factors are a very important competition, new technology will create new products with higher quality. Modern technology will enable faster production processes, save raw materials, reduce costs and still ensure quality assurance. Modern technology helps employees to perform operations quickly and promote productivity. Goods were made abundantly appropriate to customers' needs. In order to have the best quality products and reasonable prices, Vinamilk always tries to reduce production costs, lower costs and bring to market products that fit customer needs. To do that, Vinamilk has used the best technology to create quality products.

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CURRENT MARKETING STRATEGY & MARKETING MIX 1. Marketing Strategy: a. Segmentation and targeting: Segmentation Variables • Country: Vietnam Geographic Demographic • Cities: Focusing on the cities • Density: Urban • Age: 5 - 30 • Gender: Unisex, women • Income: Average • Family life cycle: young, married with children, single parents Psychographic • Lifestyle: young and dynamic Behavioral • User status: potential user, first-time user and regular user

b. Marketing positioning: - In the local country, the brand reputation of Vinamilk has been known for 40 years. Vinamilk is in the top 50 of leading listed companies in Asia – Pacific (FAB 50). - The only one milk company in Vietnam which has manufactory in foreign country (New Zealand, Cambodia). - Vinamilk’s local market share is 61%.

c. Market differentiation: - Vinamilk is trying to build more differences from customer care services by implementing nutritional counseling for consumers. - Others milk companies make the differences by producing products for specific targets, like Anlene which focus on the old people… Vinamilk concentrates on international quality standards.

2. Marketing mix (4Ps) a. Product: • Product diversification:

13 o Vinamilk has 6 yogurt brands with approximately 30 products and flavors. Meanwhile, TH True Milk now has 6 brands and about 20 products. o Always keep researching to provide new product launching the market • Product quality: o Vinamilk commits to bring customers the nutrition solution with international standards, meeting the needs of consumers with delicious and nutritious products and leading favorite brands in the market. Vinamilk yogurt always brings the best quality to satisfy customers. o Vinamilk has been ranked in Top 10 Vietnamese High Quality Product since 1995. • Branding: o Vinamilk is one of the most popular brands in Vietnam market. • Packaging: o Vinamilk always pays more attention to their packaging. o Design attractive cover to catch customer’s eye. o Cooperate with 2 packaging company from Sweden and Germany to provide highquality packaging for every product. • Product support services: o Customer service department is always willing to support and answer customer problems, provide nutritional advice about products.

b. Place: • Product diversification: o Vinamilk has 6 yogurt brands with approximately 30 products and flavors. Meanwhile, TH True Milk now has 6 brands and about 20 products. o Always keep researching to provide new product launching the market. • Product quality: o Vinamilk commits to bring customers the nutrition solution with international standards, meeting the needs of consumers with delicious and nutritious products and leading favorite brands in the market. Vinamilk yogurt always brings the best quality to satisfy customers. o Vinamilk has been ranked in Top 10 Vietnamese High Quality Product since 1995. • Branding: o Vinamilk is one of the most popular brands in Vietnam market. • Packaging: o Vinamilk always pays more attention to their packaging.

14 o Design attractive cover to catch customer’s eye. o Cooperate with 2 packaging company from Sweden and Germany to provide highquality packaging for every product. • Product support services: o Customer service department is always willing to support and answer customer problems, provide nutritional advice about products.

c. Price: • Price is an important element in marketing mix, it reflects the quality of products as well as the companies’ revenue. Vinamilk yogurt’s average price is not too high compared to the domestic market. • Vinamilk yogurt price is shown on the following table (compared with TH True Milk Yogurt) Vinamilk Yogurt TH True Milk Yogurt Normal Yogurt VND 20,400/4jars - VND 22,000/4 jars Drinking yogurt (180ml) VND 26,000/4products - VND 30,000/4products • There are some factors that impacts on Vinamilk yogurt price: o Customer valued-based cost. o Cost-based pricing: costs of producing, selling, distributing, etc. o Competition-based pricing. • Some policies that Vinamilk applied to their products (including yogurt): o Keep the price but higher quality.

15 o Stable price • Vinamilk yogurt price: Products Price Packaging ▪

Vinamilk Yogurt VND 20,400 4 jars

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Vinamilk Probi Yogurt VND 28,000 4 jars

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Vinamilk Probi Drinking Yogurt VND 17,000 65 ml x 5 jars

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Vinamilk Aloe Vera Yogurt VND 24,000 4 jars

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Vinamilk Strawberry Drinking Yogurt VND 24,300 180ml x 4 boxes

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Vinamilk Probeauty Yogurt VND 31,000 4 jars

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Vinamilk SuSu Yogurt (drinking)VND 24, 000 80ml x 6boxes

d. Promotion: • The promotion mixes tools o Advertising: Vinamilk uses the multimedia to spread their products to the customers. From there, it helps customers understand clearly about the product they purchase. For example, we often see the dairy cow image in every Vinamilk advertisement, it means that they want to share a message that their products were made from high-quality materials. o Sale promotion: Vinamilk yogurt almost does not discount on their product. But they often attract small gifts like toys in order to attract customers, especially children. o Direct marketing: Sometimes, when Vinamilk launch new products, they usually give it freely to customer. o Public relation: Vinamilk usually sponsors for the TV game shows. Besides, they often sponsor milk in many schools across the country and they also take part in environmental events. Moreover, they have been distributing more in the development of society. Therefore, they can build better brand image and public relations as well.

3. Projected marketing budget: a. Promotion budget: Social welfare (Charity, scholarship…). scholarship…).25 billion VND Vietnam milk festival 1 billion VND Giving samples to customers 4 billion VND Estimating the total cost of promotion is estimated about 30.000.000.000 V VND ND

b. Advertising media budget:

16 ❖ Television: • YEAH1 TV, VTVcab 1, VTVcab 7: Time 10s 15s 20s 11h - 11h30’ 11h30’:: 12.000.000 VND; 25.000.000 VND; 28.000.000 VND 18 - 20h 20h:: 20.000.000 VND; 27.000.000 VND; 35.000.000 VND 20h – 22h 22h:: 25.000.000 VND; 32.000.000 VND; 40.000.000 VND • VTV1, VTV3, VTV7: Time 10s 15s 20s 18h59’ 18h59’:: 20.000.000 VND 25.000.000 VND 32.500.000 VND 20h30’ 20h30’:: 22.500.000 VND 28.000.000 VND 36.250.000 VND 21h – 21h30': 25.000.000 VND 31.000.000 VND 40.000.000 VND Estimating of advertising in media in gold hours is about 168.000.000 VND VND.

❖ Internet (top banner): Size (mm) Price 24h.com.vn: 360*110 15.000 VND/click Webtretho.com: 468*90 20.000 VND/click Facebook.com: 360*90 200.000.000 VND/month Kenh14.com: 980*90 100.000.000 VND/month Estimating advertising in social networks is about 320.000....