In recent years, dairy has become one of the fastest growing sectors in the food industry of Vietnam. Along with the common trend of developing countries, Vietnam dairy’s demand is significantly increasing as a crucial supplementary nutrition source. One of the most leading dairy companies in Vietnam, Vietnam Dairy Product Joint-stock Company (Vinamilk), has operated over 30 years and gained noticeable successes in the Vietnamese fresh milk market.
Vinamilk today is considered as a Vietnamese enterprise that can deliver value to consumer successfully by understanding consumer needs, communicating and building long-term relationship between their brand and consumers. Due to Vinamik has a great variety of products, therefore, in the content of this report, it is only to expose the marketing strategy, especially the Marketing mix (4Ps) of Vinamilk with their flagship products, drinking fresh milk.
Vietnam Dairy Product Joint-stock Company (Vinamilk) was found in 1976 and is a manufacturer and trading of milk and dairy products as well as related equipment in Vietnam. According to the UN Development Program, it is the 15th largest company in Vietnam in 2007.
Official logo of Vinamilk 2012
2.0 MARKETING MIX – 4Ps of Vinamilk Fresh milk and Deliver value
4PS model is the classical model of marketing. This is the foundation of most of the solutions, strategies, assessment analysis (marketing audit) for an existing marketing strategy. Marketing mix is also considered as a method of decision-making in relation to the product, place, price and promotion in the design process of a product or a brand. This method is based on the principle of 4PS:
The product/Service policy
The price policy
The distribution/Sales policy
Advertising, Communication policy, advertising
In this part, the Marketing policy of Vinamilk will be exposed to consider how the company can deliver value to its consumers through 4Ps model.
2.1.1 Vinamilk dairy product catalog and features
Vinamilk milk products line includes many products with many flavors and packaging sizes for consumers to choose from including chocolate / added sugar, strawberry or High-calcium or Low-fat, etc. (Table 2.1: line milk products Vinamilk).
Fresh milk product line
UHT DIARY 100% (no sugar)
UHT DIARY 100% (no sugar) made from 100% fresh milk, Vinamilk Fresh milk contains essential nutrients and the purest of nature, gives you an abundant life to fully enjoy a beautiful life.
Packing: Carton 1L, 180ml paper box.
UHT DIARY 100% (added sugar)
UHT DIARY 100% (added sugar)
Made from 100% fresh milk, Vinamilk Fresh milk contains essential nutrients and the purest of nature, gives you an abundant life to fully enjoy a beautiful life.
Packing: Carton 1L, 110ml and 180ml paper box
UHT DIARY 100% (Strawberry/ favor)
UHT DIARY 100% (Strawberry favor)
Natural perfect body you need to be nourished with 100% natural source of nutrients to maintain the beauty and well-being every day.
Vinamilk Perfume Fresh Strawberry/ Chocolate milk is made â€‹â€‹from 100% pure fresh milk with nutrient blend with the most delicious natural strawberry/ Chocolate flavor sweet, add great choice for your perfect body.
Packing: Paper box 180ml and 110ml.
FRESH ADD VINAMILK 100% (no sugar)
FRESH ADD VINAMILK 100% (no sugar)
Pasteurized milk Vinamilk 100% is a combination of materials from fresh cow milk and advanced handling technology pasteurizing
Unsweetened, high-calcium and low-fat UHT MILK FLEX (Ultra High Temperature)
Get-up-and-go with UHT Milk Flex! A high-calcium and low-fat milk, Flex is the ideal source of nutrients to help you keep in shape, healthy, active and energetic.
Packing method: Carton pack 1liter, 180ml and 110ml.
VINAMILK UNSWEETENED/SWEETENED UHT MILK(Ultra High Temperature)
Vinamilk UHT Milk (in bag) is not only the essential source of nutrients but also economical, helping you and your family enjoy life to its entirety
Packing method: Bag Fino 220ml and 200ml
VINAMILK UHT MILK WITH STRAWBERRY/CHOCOLATE FLAVOR
Vinamilk UHT Milk (in bag) not only provides the essential source of nutrients but is also economical, helping you and your family enjoy life to its entirety
Packing method: Bag Fino 220ml and 200ml.
UHT MILK MILKKID:
VINAMILK SWEETENED/UNSWEETENED UHT MILK
UHT Milk for Kid is produced from fresh cow milk, rich in calcium and minerals
Packing method: Carton pack 110ml AND 180ml
VNM FORTIFIED UHT MILK
VNM FORTIFIED UHT MILK
Vinamilk additional micronutrients new advanced formula ADM + has been studied and developed in accordance with the state of the Vietnamese, which is nutrient supplements of calcium, vitamin A, vitamin D3, Magnesium, Manganese and Zinc helps develop dimensional and enhanced vision.
Packing: 180ml and 110ml
VNM FORTIFIED UHT MILK( strawberry/ chocolate favor)
VNM FORTIFIED UHT MILK
Vinamilk additional micronutrients new advanced formula ADM + has been studied and developed in accordance with the state of the Vietnamese
Packing: 180ml and 110ml
Table 2.1.1: Product lines of Vinamilk Fresh milk
To meet the increasing demands of consumers, Vinamilk has constantly renewed technology, improved product quality management. In 1999, Vinamilk successfully applied the quality management system according to international standards ISO 9002; and currently the company has applied the quality management system ISO 9001-2000. This application has shortened the quality distance between imported and domestic milk, increased the confidence and prestige of Vinamilk in competitive market.
2.1.4 Brand name:
According to Vinamilk’s annual report 2010, the company is the first and the only company in Vietnam presents in the list of “200 best enterprises in Asia Pacific in 2010” voted by Forbes magazine.
2.1.5 Research and development:
Customer demand always changes, hence the function of a marketing strategy manager is to research and find out the changes as well as renew their products to catch up with the new trends. In recent years, Vinamilk has launched some new Fresh milk products that are considered effective and highly profitable in which must include Vinamilk 100% Pasteurized Milk can satisfy the requirement of the most difficult and wise consumers. Vinamilk has invested in modern technological system is called Pasteurization technology. Vinamilk 100% Pasteurized Milk has been specially processed with advanced Pasteurization technology. Bacteria and spores are removed from milk by using the world class Bactofuge – “Bacteria Removing Centrifuges” – then the milk is pasteurized and immediately cooled down at 4 °C, thus keeping the best nutritional elements such as vitamins and minerals from pure cow milk. Vinamilk is the first dairy company in Vietnam applied this advanced technology in production world.
In general, Vinamilk has successful product strategies based on actual consumer needs, so that these strategies have effects immediately. Vinamilk Fresh milk has variety of product lines with many flavors and size; it is suitable for many age group and easy for consumer to choose. The huge investment costs for researching new technology and advertising to introduce new products also creates advantages for providing information to consumers. Besides, Vinamilk has paid attention to product quality to create the trust with consumers. Vinamilk packaging is simple but nice and meaningful also attract the attention of numerous consumers.
In the promotion strategy, advertising is considered as a strategic policy to achieve or maintain a competitive advantage in the market. In order to send their products to the majority of consumers, Vinamilk has used all means of advertising such as broadcast media, newspapers, outdoor advertising, etc. As for the advertising request, Vinamilk has almost fully met the strict requirements that an advertising message needs to achieve.
Vinamilk has built successfully the dairy cow pictures that are very cute and healthy in their advertising along with the meaningful slogan has struck on consumer psychology
Image of Vinamilk in the marketing strategy 2011
Vinamilk has built successfully the dairy cow pictures that are very cute and healthy in their advertising along with the meaningful slogan has struck on consumer psychology (Appendix 1). As a company specializing in manufacturing dairy products which supplies mainly from cow’s milk, so the image of the cows are considered typical image, the core of each clip ads of Vinamilk products. The cow image appears in each clip of vinamilk they are always singing, dancing, and exciting, funny, unique has left a memorable impression in the audience
Image of cows are dancing in marketing strategy of Vinamilk 2011
Through these ads, Vinamilk has sent the meaningful message to consumers. Dairy products are the result of labor of Vietnamese farmers, hardworking, gentle with happy and healthy cows; represents a fresh strong physical, thereby bringing fun, happiness to consumers; and that is deliver value of products, “A truly beautiful life” as the slogan has provided.
2.2.2 Public Relation:
Vinamilk has many successful community activities such as:
Vinamilk scholarship fund for Vietnamese young talents: This is one the programs that Vinamilk devotes its great dedications. During 7 consecutive years, Vinamilk has funded over 650,000 USD with total 25,040 scholarship nationwide (Vinamilk Annual report 2010).
Aesenal – Vinamilk Soccer School: offers different class for children from 5 to 18 ages that will be trained by well-known coaches who are instructed by Arsenal’s professions in UK. This soccer center is currently receiving many attentions and supports from children’s parents; and today reaches over 2,000 trainees.
Milk fund for poor children in Vietnam: In 2009, the fund of “Six Million Glasses of Milk for Children in Vietnam” with the cooperation between Vinamilk and the Ministry of Labor, War Invalids and Social Affairs, National Fund for Vietnamese children, National Institute of Nutrion and Ministry of Education and Training. Through this program, there were over 6 mill glasses of milk, equivalent to 1.25 million USD brought to nearly 50,000 children in 62 provinces across the country.
With many communication strategies to contribute and benefit to society that have been well received and enthusiasm by consumers that makes Vinamilk brand more friendly to consumers apart of production and sales activities. This also contributes to building the beautiful image of Vinamilk to consumers.
Evaluating briefly the fresh milk market situation in Vietnam, the supply source is lacking while fresh milk is the indispensable demand for citizen.. Therefore, the low price is not the strategy which the company is pursuing. Some pricing strategies which Vinamilk is performing include:
2.3.1 High quality is accompanied by high price
Vinamilk always improves the quality of their fresh milk products with more and more nutrition value than their previous ranges. In the mind of consumers, the high quality of products interprets the reasons why the price of Vinamilk’s fresh milk is increasing more and more. Once Vinamilk decreases the price, they will lose the illustrious quality in customers’ awareness.
2.3.2 Keep the price but higher quality
Once fresh milk quality of other competitors is evaluated lower than Vinamilk’s, the fact of stable price will attract and satisfy consumers’ demand. Although the world price of raw milk is decreasing, but from the beginning of July, 2008 till now many dairy companies that dominant market share in Vietnam market have increased their prices from 7-15%. In this increase of price, only two firms are Nutrifood and Vinamilk still keep remaining their prices (Saigon Marketing, No.209, 2010).
2.3.3 Purchase price policy of raw fresh milk
Vinamilk is pursuing the policy: Towards the rural area where there are many grasses with good breeding, no urbanization but far transport, they will purchase raw fresh milk in low price to balance the cost of other ranges. Furthermore, they always adjust price according to seasonal nature and external market. They also has built a great size of farm to decrease the burden in purchasing input.
Deliver value: With reasonable price policy, Vinamilk has created competitive advantage towards other competitors as well as satisfy the needs of major consumers. They have maintained the high pricing strategy to gain the high quality of products in the awareness of customers. As a result, a great number of customers have accepted these prices to exchange the belief of high quality.
Currently Vinamilk has two distribution channels to deliver products to consumers:
Distribution through traditional channels (includes 220 independent distributors and over 140,000 retail outlets) distributing more than 80% of the company’s products. To support its distribution network, the company has opened 14 showrooms in the big cities like Hanoi, Danang, Ho Chi Minh and Can Tho, etc.
Distribution through modern channels (such as supermarket, Metro, etc): The advantage of the company is having a wide and strong distribution network, through the dairy factories invested in many places spread throughout the country; with 1,400 level-one agents as well distribution network spread across the country with 5,000 agents and 140,000 retailers and the other direct distribution channels such as schools, hospitals, supermarket, etc..
In order to effectively manage the distribution channels, Vinamilk has been using the modern information technology applications such as Oracle E Business Suite 11i; Enterprise Resource Planning (ERP) and Customer Relationship Management – SAP, etc.
The above applications are powerful tools for supporting staff in their work, allowing Vinamilk distribution network across the country to connect with the central information in both online and offline situations. The focused information will help the company to make timely as well accurate support planning. The collection and management of sales information of the agents is to respond timely and provide to customers satisfaction at higher levels.
With the right marketing strategy, fresh milk scope of Vinamilk has created a large market share in the Vietnamese market to provide value to its customers as well as giving the company a competitive advantage for other competitors. This shows the effectiveness and importance of the marketing mix strategy in the current business situation for one of the big companies like Vinamilk. In particular, products and promotions are focused to confirm the credibility and value of the company would like to offer to their consumers. Although, Vinamilk is successful with their strategy, but in the long term, while the dairy market is very complex in Vietnam today, the change of strategy is needed. Vinamilk adjust marketing strategies better suit customer loyalty and maintain prices, more improvement to achieve the highest advantage.