Marketing Assignment - Part 2 - Milk Essay Example

Vinamilk was founded in 1976 - Marketing Assignment introduction. Now, Vinamilk is headquartered at Tan Phu ward, District 7, Ho Chi Minh City. The general director of Vinamilk is Ms. Mai Kieu Lien who has just ranked on Forbes list of 50 women entrepreneurs with the most power in Asia. Vinamlik are the leading producer of dairy products in Vietnam based on sales volume and revenue. Our products range from core dairy products such as liquid and powdered milk, to value-added dairy products such as condensed milk, drinking and spoon yoghurt, ice cream, and cheese.

We offer one of the largest dairy portfolios in Vietnam, across a wide selection of products, flavours, and packaging sizes. According to Euromonitor, Vinamilk has been the number [1] dairy player in Vietnam for the three years ending 31 December 2007. Since commencing operation in 1976 we have built the largest distribution network in Vietnam and have leveraged our network to introduce new products to the market, such as juices, soya milk, bottled drinking water and coffee. And now, Vinamilk focuses on dairy products.

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We market the majority of our products under our “Vinamilk” brand, which has been designated as both fmous brand and one of the top 100 strongest brands by the Vietnamese Ministry of Industry and Trade in 2006. We have also been voted the top brand in the “Top ten high-quality Vietnamese goods” for each year from 1995 to 2007. We currently focus on business activities in the fast growing Vietnamese dairy market, which according to Euromonitor has grown at a CAGR of [7. 85]% from 1997 to 2007, and produce the majority of our products at our [nine] operational production facilities with a combined capacity of [570,406] tonnes per annum.

Vinamilk has the leading distribution network in Vietnam, giving us broad access to consumers. We generate a substantial majority of our revenues from sales of our products in Vietnam comprising both dairy and non-dairy products and export to countries such as Australia, Cambodia, Iraq, the Philippines and the United States. 1. 2 Vision and Mission. 1. 2. 1 Vision. Vinamilk will be the fastest and sustainable growing healthy dairy and food-company by building a long-term competitive advantaged product portfolio across the scale. 1. 2. 2 Mission.

Vinamilk continues to expand its existing geographical coverage and product portfolios to maintain its sustainably dominant position in the local market and maximizing its shareholder value. 1. 2. 3 Business Philosophy. Vinamilk wish to be the most favourite product in all areas, territories. Therefore, we meditate that quality and creation is the companion of Vinamilk. Vinamilk considers customers our focus and commit to meet all demands of customers. Vietnam Dairy Products Joint Stock Company’s quality policy Always, satisfy customers with high-quality, safe, and diverse products, the best service and competitive prices. . Business Environment (SWOT). 2. 1 External environment (Opportunities and Threats). 2. 1. 1 Opportunities. * In the world, the price of dairy products tend to increase thus Vinamilk has advantages to compete in exporting products. And, in the world, dairy’s market is in the period of strong demand.

* Both the rate of Vietnam and the world economic are growing high. * The Vietnamese income has increased. * Vietnam officially joined the World Trade Organization. * Vietnam has a stable political regime. * Vietnam is in the period of “gold structure population”. In the world, a series of advanced technologies formed to support for fostering the dairy herds. Vinamilk is allowed to build a company in New Zealand and to collect and buy milk from farmers of Taupo to process into high products. Vinamilk focuses on exporting products to Cambodia, Philippine and Australia, etc… According to Ministry of Statistics, at the end of 2011, the average income of Vietnam in 2011 reached $ 1,300. In 2007, Mr. Truong Dinh Tuyen, the Ministry of Industry and Trade negotiated for WTO accession of Vietnam. The WTO’s accession of Vietnam is one of the best opportunities for all companies to access the world markets.

There are very fair for all businesses. Mr. Tuyen was really to create opportunities and new challenges for Vietnam. Vietnam is famous for a stable political regime. There isn’t violence, civil war in Vietnam. Most of people can live in peace. This has created favorable conditions for enterprises to invest in Vietnam. Besides, with a low labor cost, Vietnam has a potential workforce. 2. 1. 2 Threats. * The government can’t control the milk’s price in the market. * The exchange rate is unstable and Vietnam’s money is regularly going down. * Inflation is increasing. * The government’s management is loose, overlapping and inefficient. In Vietnam, the control of milk quality is not high efficiency.

* The competitors are increasing in the country and abroad. * The fostering of dairy cattle is also spontaneous, inexperienced in management and small-scale farms. * In the world, the price of milk powder makes pressure on Vietnam’s dairy production. Vinamilk is also pressured from substitute products. The government can’t control the milk’s price. Nowadays, the price of milk increase very quikly in Vietnam. The General Department of Customs has just prompted a number of provinces and cities on the management of the milk’s importation that has not been close especially n Dong Nai province and Da Nang city. In the European and Australia market, the price of powder milk is from 2950 USD to 3150 USD per ton. Some dairy companies have also applied the new price increase of 5% to 10% in the domestic market. The XO milk of Korea has also applied the new price for fourteen dairy products with an increaseing from 2. 5% to 5%. Thus, from the beginning of the year, milk prices have increased at least 3 times, with a total increase of some dairy products has risen to nearly 20%. In Vietnam, Dairy is one of the key sectors to develop the local economy.

So, the management of the price of milk and the importation of milk must be very close. No. | Products (1 box)| Price (VND)| 1| Sure Prevent| 183. 000| 2| Dielac Mama| 145. 000| 3| Dielac Alpha 123| 185. 000| 4| Dielac Pedia| 314. 000| 5| Nestlé Nan| 2. 340. 000| 6| XO 2| 426. 000| 7| Wakodo red| 519. 000| 8| Meiji Gold 1| 405. 000| 9| Similac Neosure| 518. 000| 10| Ensure Gold| 1. 053. 000| Vietnam is in the top five of the world’s inflation. In 2011,Vietnam’s inflation got the minimum at 18. 6% according to the Ministry of Statistics. The inflation is one of the elements to threat Vietnam’s economy and even the economy of the world.

The inflation of Vietnam in the first six months in 2011. The government can control the quality of milk. There have melamine in China milk. They just detect toxic to cause cancer from China milk. Yili milk contains substances that cause kidney stones. The Police in Hue city have just detected 10,000 cans of milk branded Ensure chich are labeled false. Otherwise, there are a lot of competitors in Vietnam like Abbott, Dumex, XO, Th-True milk, Ensure, Ducth Lady, Meiji, Stimilac, Wakodo, etc… The fostering of dairy cattle is also spontaneous, inexperienced in management and small-scale farms.

There are a lot of farmers who to foster dairy in the spontaneous and they don’t have experience in management. That is the reason to make the quality of milk reduced. The milk collection is also very difficult for the company. The spontaneous of the farmers in Dong Nai 2. 2 Internal Environment (Strengths and Weakness). 2. 2. 1 Strengths. * The Vinamilk’s equipment and technologies of production are modernized in advanced according to international standards. * Vinamilk owns a vast network of factories. And, the factories always operate with a stability capacity to meet the market’s demands. Vinamilk has a professional management system is operated by a qualified and experienced management team. The company has a qualified staff, highly dynamic and knowledge. It always arranges to train and develop human resources in accordance with the situation of the company * Vinamilk can take the initiative in capital and use it effectively.

The company has growth rapidly through the years. * Vinamilk has invested to build a dairy farm most modern in Vietnam and Southeast Asia. * Vinamilk usually has specially rewards and policies for individuals, groups who have positive contribution to the company. Vinamilk has a spread-eagled marketing strategy and an experienced and skilful sales team of marketing. * Vinamilk has a competitive distribution network to the competitors and usually access to the customers in many agents of sales. * There’s always the respect and cooperation for each other between leadership and staff in the Vinamilk to support for a happy working environment. Vinamilk’s equipment and technologies of production are modernized in advanced according to international standards. Vinamilk has invested buying many moderned technologies from the Netherlands and American.

In order to export high quality products to the world, the line production are often modernized to meet the the international standard. And, one the best way to make the reputation with customers is that to produce high quality products with the best price. With the high technologies, the company always operates with a stability capacity to meet the market’s demands. The technologies of Vinamilk The company has a professional management system is operated by a qualified and experienced management team. The management team of Vinamilk was trained very hard.

They have many opportunities to practice with business environment so they have a lot of experience. Vinamilk’s staffs are also trained in special invironment to meet the demand of the company. The sales staffs are trained separately and others staffs is also. They are trained by professinal experts. Vinamilk always tests very cleary for candidates who want to find a job in Vinamilk coporration. The cadidates have at leats three-yeared experience in businness. There are usually two training courses for the company’s staffs in each year. Vinamilk can take the initiative in capital and use it effectively.

With the big capital investment, the company can take the initiative in every activity. They take the initiative in marketing, building new factories, importing materials, buying technology production, doing charity, buying dairy from Australia, etc… Tobe allowed by the government, Vinamilk has cooperated with Miraka Limited (New Zealand) to build Miraka milk powder plant which is located in the central North Island of New Zealand. The total project investment of Vinamilk is 90 million New Zealand dollars, accounting for 19. 3% for Vinamilk. The milk tank of Vinamilk in New Zealand (Miraka)

Besides, depending on the professional and experienced management team, the company can utilize and use the capital effectively. Only in the three first years of 2012, Vinamilk has increased 26. 23% to the same time of last year. The company usually has specially rewards and policies for individuals, groups who have positive contribution to the company. The company usually honors inviduals, groups who have good ideas, creations. Every year, they held to review, evaluate and honor the individuals, the collectives who have successfully completed the task of the year. There always have special rewards for that individuals and collectives.

The company has a competitive distribution network to the competitors. Vinamilk has four big branches (Can Tho, Ha Noi, Da Nang and Dong Nai) in the country. Besides, company connected to all supermartkets, Vinatex marts, Big Cs and Metrols to provide many kinds of products. Vinamilk also has thousands of sales agents to cover over the country. With the experienced sales teams, it has brought high profits for the company. There is always a happy invironment working in Vinamilk. One of the most important to go to the success of the company is that the working invironment.

In the Vinamilk, there’s always the respect and cooperation for each other between leadership and staff to support for a happy working environment. With the professional tyle of working, most of the leadership and staff are always mutual sympathetic to help for each others. 2. 2. 2 Weakness. * Vinamilk is still depending on importing the material of milk powder from overseas. * The result from marketing still is not well-match with the investment.

* Marketing activities just focused in the South while the Vietnam’s population in the North accounting for two-third of the national population has not been investing heavily. In addition to dairy products, the other products of company (beer, coffee, green tea, etc…) are not highly competitive. Vinamilk is still depending on importing the material of milk powder from overseas. Acorrding to General Department of Customs, Vietnam has imported milk and products of milk up to 60% over the same period last year, reaching USD 432 million in the first 6 months of this year. So, the imports the material of milk powder from overseas affects to the production of the company. The company can not meet demand of the market. The result from marketing still is not well-match with the investment.

According to the report of Vinamilk, in the first six the result from marketing was not well-match with the investment of the company. It may be affected by the external elements. Beside that, it also not clearly reflects the quality of milk. So, the customers go to find other products. Marketing activities just focused in the South of Vietnam’s population in the North accounting for two-third of the national population has not been investing heavily: may be in the North most of people don’t like products of Vinamilk. In this case, Vinamilk is not really to do marketing in the North while the Vietnam’s population account for two-third.

Vinamilk must concentrate to do marketing in the North. Some products of company (beer, coffee, green tea, etc…) are not highly competitive. Vinamilk should concentrate to produce potential products. It will increase the market share of the company in the market. Otherwise, some products of the Vinamilk like beer, coffee, green tea which is not the competitors to the Heniken, Tiger, Saigon, Trung Nguyen, etc … 3. Summary and solutions. Vinamilk is the largest dairy companies in Vietnam that is currently accounting for 35% market share.

However, Vinamilk is still not as big competitors of the companies like Nestlé, Abbott, Dumex, Ducth Lady, Wakodo, etc… Vinamilk have a lot of strong points like a vast network of factories, modernized equipment and technologies of production, professional management system, experienced management team and spread-eagled marketing strategies, etc … But, to compete with competitors, the company has to overcome some weak points like the import of the milk powder, focusing main products, having a perfect marketing strategy, spending more time to access the customers, making market survey, etc… Bisides, Vinamilk must has a stable price strategies, promotional strategies, consistent pricing policies, pricing policies for new products, policies on discounts and commissions.

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