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Vinamilk: Leading Vietnam's Dairy Market

Vinamilk is the leading dairy company in Vietnam, holding a 35% market share despite competition from other large companies. It was established in 1976 and has grown significantly, currently producing over 200 dairy products. Vinamilk employs a successful 4Ps marketing strategy, focusing on a wide product range, competitive pricing, a large domestic distribution network, and substantial advertising investments. This approach has helped Vinamilk become the dominant player in the Vietnamese dairy industry.

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0% found this document useful (0 votes)
43 views4 pages

Vinamilk: Leading Vietnam's Dairy Market

Vinamilk is the leading dairy company in Vietnam, holding a 35% market share despite competition from other large companies. It was established in 1976 and has grown significantly, currently producing over 200 dairy products. Vinamilk employs a successful 4Ps marketing strategy, focusing on a wide product range, competitive pricing, a large domestic distribution network, and substantial advertising investments. This approach has helped Vinamilk become the dominant player in the Vietnamese dairy industry.

Uploaded by

Tân Nguyễn
Copyright
© All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as DOCX, PDF, TXT or read online on Scribd

Tên: Nguyễn Vũ Tân.

MSSV: SE140480
Individual assignment.
Option 2: Analyze a chosen marketing campaign, social media campaign…

Currently, the increasing trend of dairy consumption has helped the dairy industry thrive in
recent years. According to the General Statistics Office, the average growth rate of the dairy
market from 2000 to 2009 reached more than 9% / year, the per capita milk consumption
increased by 7.85% per year. However, according to Mr. Hoang Kim Giao - Director of the
Department of Livestock Production under the Ministry of Agriculture and Rural Development,
the current production capacity of the domestic livestock industry can only produce 3.2 kg of
milk per person per year per capita, equivalent to 28% of consumption demand. Therefore, the
Government has a plan to invest in dairy farms and milk processing technology to increase
domestic fresh milk production, and loosen dependence on imported milk powder. Foreseeing
the above problems, Vinami Ik Company has continuously diversified its products and expanded
many dairy farms nationwide. As a result, in the current dairy market in Vietnam, despite fierce
competition with many strong competitors such as Abott, Dutch Lady, Lothamilk ... but Vinamilk
still holds 35% of Vietnam's dairy market share.
About the Vinamilk company:
● The Company was established on August 20, 1976, so far Vinamilk has become the leading
company in processing and supplying dairy products, ranked in the Top 10 strong brands in
Vietnam. Vinamilk not only occupies 75% of the domestic dairy market share but also exports
its products to many countries around the world such as the US, France, Canada, ...
● Operating for more than 10 years in the subsidy mechanism, like many other companies only
produce according to plan, but when entering the market economy, Vinamilk quickly seizes
opportunities, constantly innovates technology, investment in infrastructure, product
diversification to prepare for a new journey.
● Continuously expanding production, building more factories across the country (currently 5
more factories are continuing to be built), Vinamilk's revenue is more than 6,000 billion VND /
year, contributing to the state budget each. year over 500 billion.
● Vinamilk currently has over 200 dairy products and dairy products such as condensed milk,
powdered milk for children and adults, nutritional powder, fresh milk, drinking yogurt, soymilk,
ice cream, cheese, fruit juices, biscuits, purified water, coffee, tea ...
● Currently, the company has more than 180 distributors, more than 80,000 retail points
nationwide.
● If in 2001, the Company had 70 agents transferring fresh milk, until now it has 82 agents
nationwide, with the amount of milk purchased about 230 tons / day. These transfer agents are
systematically organized, widely and reasonably distributed to help farmers deliver milk in the
fastest and convenient way.
● Vinamilk has also invested 11 billion VND in building 60 milk tanks and a preliminary
workshop with equipment to preserve fresh milk. Vinamilk's technical staff regularly come to
farms and households to inspect and advise on high productivity and quality dairy cow breeding
techniques.
● Thanks to reasonable support measures, incentive policies, and incentives, Vinamilk has
created jobs for thousands of rural workers, helping farmers to stick with the company and with
dairy farming, contributing to change rural appearance and improving living standards; raising
the total number of dairy cows from 31,000 to 105,000.
● Commitment to International Quality and Quality Vinamilk has affirmed the goal of
conquering people regardless of national borders of the brand name of Vinamilk. Actively
integrating, Vinamilk has prepared from human resources to facilities and business capabilities
to steadily enter the markets of WTO countries with a mark of Vietnam Brand name. 2. Vision:
"To become the number one belief symbol in Vietnam about nutritional and health products
serving human life". 3. Mission: “Vinamilk is committed to bringing the community the best and
best quality nutrition with respect his love and high responsibility for human life and society ".
4. Core Values: "To become the leading symbol of belief in Vietnam about health and nutrition
products serving human life". 5. Company size:
• Vinamilk has 10,000 employees, with more than 30 member units all over the country and its
subsidiaries, factories and farms located outside. Setting the target strategy of bringing
Vinamilk into the Top 30 largest dairy companies in the world, for many years, this enterprise
has started to build a team of talent for itself.
• Over 43 years of establishment and development, from the first three next factories, up to
now, Vinamilk has expanded its scale to 40 units including branches, factories, dairy farms, and
logistics and subsidiaries, affiliates both at home and abroad.
Vinamilk is very ingenious when it comes to the 4Ps marketing strategy. That has helped
Vinamilk succeed in the dairy market in Vietnam.
4Ps strategy definition: 4P in marketing (also known as marketing mix) is a set of marketing
tools including: product, price, place, promotion. The marketing mix strategy is used by the
business to achieve the marketing focus in the target market.
Following is vinamilk 4Ps strategy:
•Product:
As of late, Vinamilk has invested a lot of energy to grow the Company's image to address the
issues of clients from babies, kids, teenagers, grown-ups, and furthermore individuals with
uncommon necessities. Other than the items with principle brand name as "Vinamilk", the
Company likewise claims the brand name "Dielac" for its powder milk product offering, and
"Vfresh" for the results of drink line.

In present, Vinamilk possesses an item portfolio with an enormous number of product


offerings. The product offerings of Vinamilk that recorded in the Company's yearly report 2013
include: powdered milk and sustenance powder, improved dense milk, fluid milk, yogurt, and
drink. Among such assortments of product offerings, the center lines of Vinamilk are fluid milk,
yogurt, powdered milk, and consolidated milk. Until the finish of 2013 in Vietnam's dairy, fluid
milk, yogurt, and consolidated milk results of Vinamilk have driven the piece of the pie with
roughly 60%, 70%, and 90 percent separately. The control of these items in the absolute income
of Vinamilk in 2013 is appeared in Figure 8 underneath.
• Price:
Other than product offerings of yogurt and consolidated milk, which overpower the
homegrown dairy market, different items lines of Vinamilk face the exceptional rivalry with
other homegrown dairy makers. In that situation, estimating is viewed as one of the essential
qualities of Vinamilk in the opposition with its adversaries. The item costs of Vinamilk are very
little unique contrasting with its rivals', particularly in the fluid milk area. For instance, in a
general store situated in a region of Ho Chi Minh City, Vinamilk's cost of a 1-liter new milk box is
about VND 33 300, while a similar item sort of different organizations (TH True Milk, Love'in
Farm, Lothamilk, or Dutch Lady) range from VND 27 600 - 34 000. From the start of April 2012,
Vinamilk had partaken in the responsibility of balancing out costs for a few items like some fluid
milk items, powdered milk for kids, seniors, and patients. Despite the fact that the world's milk
crude materials had persistently expanded more than 20% from the center of 2012, Vinamilk
actually kept the costs stable for the entire year.
• Place:
During the past few years, the distribution network of Vinamilk has continued to be
consolidated and strongly grown in both domestic and international market. Due to the
research scale, the author only focuses on the domestic distribution system in this part.
• Promotion
Exceptionally putting resources into ads
In 2013, Vinamilk spent around VND 885 billion for promotions, and the sum was likewise
anticipated to surpass VND 1000 billion (~US$ 46.9 million, Bloomberg, 2014) in 2014.
Concurring late 46 insights in the principal half of 2014, the costs for promotions of Vinamilk is
about VND 462 billion and involves one-fourth in complete expense of deals.
Besides focusing on the advertising strategies, Vinamilk also perceives the importance of
actions that bring sustainable values to the society and the community. The most typical ones
are: the Scholarship Fund “Vinamilk - Nurturing Vietnamese young talent”, the “Vietnam Never
Stops Growing” Milk Fund, and the “One million green trees for Vietnam” fund.
This is what Vinamilk has done and achieved when applying the concept of marketing mix 4Ps
to become the largest dairy company in the Vietnamese dairy market today.

Common questions

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Vinamilk's robust distribution strategy is a key contributor to its dominance in the domestic market, involving an extensive network of distributors and retail points. The company has over 180 distributors and 80,000 retail points nationwide, ensuring comprehensive market penetration . By systematically organizing milk transfer agents and investing in infrastructure like milk tanks, Vinamilk facilitates efficient and timely delivery of fresh milk . This well-established distribution framework enables wide product reach and accessibility, essential for capturing a significant market share and maintaining consumer trust. Such strategic distribution ensures Vinamilk meets and sustains high consumer demand efficiently, reinforcing its leading position in Vietnam .

Vinamilk has leveraged its marketing mix strategy to enhance brand recognition through a holistic approach involving aggressive product diversification, strategic pricing, wide distribution, and substantial promotional efforts. Domestically, Vinamilk has ensured a strong presence by maintaining competitive prices and expanding its product line to cater to diverse consumer needs. Internationally, Vinamilk has expanded its distribution network, making its products available in multiple countries like the US and France . The promotion aspect of their strategy includes extensive advertising and CSR initiatives like the Scholarship Fund and the Milk Fund, which not only boost its brand image but also reinforce consumer trust . These combined efforts have helped Vinamilk to establish a strong brand presence and recognition both within Vietnam and globally.

Vinamilk has adeptly adapted its product offerings to meet diverse consumer needs by expanding its product lineup to include options for all age groups and dietary requirements. This includes not only basic dairy products like milk and yogurt but also specialized lines such as "Dielac" for powdered milk and "Vfresh" for beverages . The company addresses specific market segments by launching products tailored to children, adults, and those with special nutrition needs. By continuously optimizing and expanding its product range, Vinamilk is able to capture a wider audience and address the diverse preferences of Vietnamese consumers, solidifying its stronghold in the market .

Vinamilk's approach to production and supply has significantly contributed to its success by focusing on sustainable growth and local capacity building. The company has invested 11 billion VND in infrastructure such as milk tanks and workshops to enhance milk preservation. Additionally, Vinamilk's technical staff regularly provides support and training to farmers, leading to increased dairy cow productivity and quality . By creating jobs and fostering long-term relationships with local farmers, Vinamilk has not only secured a reliable supply chain but also elevated rural standards of living, which in turn supports a stable supply of high-quality milk. These efforts have allowed Vinamilk to meet the increasing domestic demand for dairy products and reduce dependence on imports .

Vinamilk faces several challenges in the domestic dairy market, including stiff competition from other brands such as Abbott and Dutch Lady. To tackle these challenges, Vinamilk has diversified its product offerings and continuously expanded its production capacity, constructing new factories across Vietnam. This expansion helps Vinamilk maintain a competitive edge in product variety and availability . Additionally, the company has adopted competitive pricing strategies, especially for staple products like fluid milk, to ensure price competitiveness against its rivals . These strategies are pivotal in securing and expanding its market share amidst tough competition.

Vinamilk has successfully maintained its leading position in Vietnam's dairy market through a comprehensive implementation of the marketing mix's 4Ps strategy, involving product innovation, competitive pricing, robust distribution, and impactful promotion campaigns. Vinamilk has diversified its product portfolio to cater to a wide range of consumer needs, from babies to adults with special dietary requirements . The company has also strategically priced its products to remain competitive, particularly in the fluid milk sector where slight price differences are observed compared to rivals . Furthermore, Vinamilk has significantly invested in expanding its distribution network both domestically and internationally, ensuring the wide availability of its products . In terms of promotion, Vinamilk has heavily invested in advertising and initiatives that deliver societal value, such as scholarships and green initiatives . These strategies collectively reinforce Vinamilk's dominance in the market.

Vinamilk's investment in infrastructure and innovation has significantly boosted its operational efficiency and solidified its market position. By investing in new factories and enhancing existing facilities, Vinamilk has increased its production capacity to meet growing demand . The company has also invested in advanced milk preservation technologies and offers technical support to farmers, ensuring higher yields and improved milk quality . These investments enable Vinamilk to maintain high supply quality while reducing operational costs associated with inefficient supply chains. The increased efficiency helps Vinamilk sustain competitive pricing, further strengthening its position in the dairy industry .

Corporate social responsibility (CSR) and sustainable practices play a crucial role in Vinamilk's growth strategy by enhancing its brand reputation and fostering consumer loyalty. Through initiatives such as the "Vinamilk - Nurturing Vietnamese Young Talent" scholarship and environmental campaigns like the "One million green trees for Vietnam" fund, Vinamilk demonstrates a commitment to societal well-being and environmental sustainability . These efforts not only build goodwill and strengthen community ties but also appeal to socially conscious consumers. By integrating CSR into its core strategy, Vinamilk differentiates itself from competitors, which supports sustainable growth and increases its market share domestically and internationally .

Vinamilk employs several strategic initiatives to enhance rural development and support local dairy farmers, which include investment in milk preservation infrastructure and provision of technical support. By building milk tanks and workshops, Vinamilk improves fresh milk storage, which helps in maintaining quality . Additionally, the company’s technical staff regularly visits farms to offer advice on high-productivity and quality-enhancing dairy cow breeding techniques, fostering skill development among farmers . These initiatives not only improve the livelihood of rural communities by increasing dairy cow productivity from 31,000 to 105,000 but also ensure a steady supply of high-quality milk, integral to Vinamilk's production efficiency and brand reputation .

Vinamilk's pricing strategy plays a pivotal role in its competitiveness within the Vietnamese dairy market by ensuring that its product prices are closely aligned with those of its competitors. This approach allows Vinamilk to remain competitive, especially in the fluid milk sector where it is crucial to maintain price parity or slight variations with rivals like TH True Milk and Dutch Lady . Despite fluctuations in global milk prices, Vinamilk has managed to stabilize its prices, leveraging its efficient production processes and economies of scale . This stable pricing not only enhances consumer affordability but also prevents market share erosion by maintaining consumer confidence and preference for Vinamilk products over alternatives.

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